I NVESTORS & A NALYSTS O UTLINE Section Page 1. Africa - - PowerPoint PPT Presentation

AN IMPRESSIVE START: 2018 FIRST QUARTER RESULTS PRESENTATION TO INVESTORS & ANALYSTS

OUTLINE

Section Page 1. Africa Prudential Overview 02 2. Domestic Operating Environment 09 3. Financial Overview 12 4. 2018 Outlook 18 5. Appendix 21

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1

AFRICA PRUDENTIAL OVERVIEW

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AFRICA PRUDENTIAL

FUNDAMENTAL STATISTICS

First and only registrar firm listed

• n the Nigerian Stock Exchange

70

Over

Clients

Manages over 70 client registers, made up of over 3 million shareholders First among corporate registrars for its technological innovations

AFRIPRUD

4

N

Shareholders Fund of N6.64billion, lower by 4% YTD; largely due to increase in dividend paid Africa Prudential is strategically located in the commercial capital of Nigeria, Lagos; the political capital, Abuja; and Port-Harcourt.

3 2

Total revenue: N1.01billion, compared to N0.65billion in Q1 2017 (55% YoY growth). Profit After Tax: N0.46billion, an impressive 22% YoY growth compared to Q12017 The top management of the Company have a track record of providing registrar as well as allied services to the Nigerian Money and Capital Markets.

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Diversified business lines broadening revenue streams

OUR JOURNEY SO FAR…

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UBA Registrar Department was created in 1970 Accounts/clients increased from 15 to 17 Asset book of over N1.4billion with N63.4million gross earnings No computerization (transactions were done manually) UBA Registrar was incorporated in 2006 Accounts/Clients increased from 17 to 50 Gross earnings rose to N1.9billion and asset book rose to N14.1billion Innovation and capacity building commenced

A B

Asset book increased to N18billion while gross earnings increased to N3.3billion Clients increased to over 70 The Company’s name changed to Africa Prudential Registrar in 2013 Acquisition of UAC Registrars Limited with 4 clients base Number of shareholders increased to

• ver 280,000 shareholders

APR was listed in January 2013 The Company’s name changed to Africa Prudential Plc in 2017

• Projected

gross earnings

• f

N10billion

• Implementation
• f

Strategic Business Segmentation

• Total

Separation

• f

registrar business

• Total

Separation

• f

E-Solutions Business

• Entrance into the African market

1 3 2

1A: 1970 – 2006 & 1B: 2006 - 2012 2013 - 2017 2018 - 2025 Phase Phase Phase

OUR STRATEGY

• Africa Prudential would play in three major markets which includes:

― Registrar business ― E-solution Business ― African Market

• Each business areas would be led by a “Business Lead” and would run as a separate business

Africa Prudential Registrar Business

1

African Market

3

E-Solutions Business

2

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OUR ASPIRATIONS

Over the next 7 years, Africa Prudential is poised to be #1 in Nigeria, with an aspiration to expand into the African market, driven by technology and reinforced by a strong capital base. Implementation of Strategic Business Segmentation Total Separation of Registrar Business Total Separation of E-Solutions Business Entry Into the African Market Market Leader with Technology And Innovation Sustain Strong Capital Base To Penetrate Other African Markets

#1 In

Nigeria

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✓ First registrar portal developed in 2008 ✓ Most profitable subsidiary of UBA group in 2009 ✓ Engaged in debt recovery, process review/reengineering as well as brand resuscitation ✓ Created a Strategic Business Transformation Department ✓ International Quality Crown Award 2013 ✓ Best Top 25 CEOs Award 2013 ✓ The Company was listed on the Nigerian Stock Exchange in January 2013 ✓ 1 billion share right issue (over subscribed by 125%) ✓ Commencement of Blue Ocean Strategy as well as market focus on the Cooperative Sector ✓ Setting up the structure for business segmentation (Registrars, E-Solution and Africa Focus) ✓ Best Profit Margin Ratio Company - PEARL Award 2015 ✓ Best Corporate Governance Company in Nigeria, PEARL Award 2015 ✓ Best Registrar Firm in West Africa - 2017, Africa-Canada Trade Alliance, West Africa Innovation and Excellence Awards ✓ Robust Internal Control mechanism and Corporate Governance structure that support operations ✓ First registrar company to pay e-dividend

KEY ACTIVITIES AND AWARDS

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Phase One A: (1970 - 2006) Phase One B: (2006 - 2013) Phase Two: (2013 - 2017)

Phase One A: (1970 - 2005)

Phase Two: (2014 - 2017)

Information Technology

• IT

is the bedrock

• f
• ur

digital aspirations and innovation.

• Our track record of being first in innovative products is

driven by our belief that IT is key to our survival as a company. Easy Access

• Our platforms can be easily accessed through various

devices such as laptops, smartphones etc.

• Our simplified USSD code also provides easy access to our

various products.

DRIVEN BY TECHNOLOGY

Information Technology

01 Easy Access 02 User Friendly 03

User Friendly

• Our technology has been designed to be highly user friendly

with an interface that enables our clients to have the best experience. Page|8

2

OPERATING ENVIRONMENT

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OPERATING ENVIRONMENT

• The Nigerian economy finally exited recession by Q2 of 2017 after 5

consecutive quarters of contractions.

• The recovery was driven largely by growth in international crude oil

prices which traded at an all-time high of US$52.4 per barrel by close of 31st December 2017 and growth of the agricultural, manufacturing and trade sectors.

• Inflation dropped by 282 basis points from 15.13% in January to 13.34%

in March 2018. The exchange rate also stabilized, with the Naira exchanging for the US Dollar at an average of N360/USD.

REGULATORY ENVIRONMENT

• The Nigerian capital market witnessed gradual recovery from its

bearish trend which persisted for the first 6 months of 2017 with investors

• n the Nigerian Stock Exchange(NSE) gaining around N4.3 trillion by

end of 2017 as capitalization grew by 47%.

• This was influenced by improved half year reports of some major stocks

and increased foreign portfolio investment.

• Throughout the year, there was no new public offer for subscription.
• But in a show of a positive sign of gradual recovery, towards the last

quarter of 2017, the market witnessed a respectable number of Rights Issues which were all remarkably successful.

CAPITAL MARKETS

• The Securities and Exchange Commission (SEC) has directed the

stoppage of dividend warrant issuance effective 1st January 2018.

• Furthermore, SEC also announced the extension of free e-dividend

mandate registration window to 28th February 2018. Consequently, e- dividend mandate enrolment after 28th February 2018 will attract a fee.

• The Commission also hinted on plans to commence enforcement of

electronic transmission

• f

annual reports. The pilot scheme commenced in 2017.

• In line with the Commission’s directive on mandatory consolidation of

multiple shareholding accounts, the Commission further extended the forbearance window for multiple accounts consolidation to 31st March 2018 to enable shareholders with such accounts in the same company to consolidate the accounts.

• SEC has also mandated all investors to key into the Direct Cash

Settlement (DCS) initiative effective 1st September 2017. The DCS initiative allows proceeds of shares sold to settle directly into an investor’s account as against through the broker’s account.

THE DOMESTIC ECONOMY

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Monetary policy – Interest Rate Exchange Rate Inflation Rate ▪ At all the MPC meetings held from January 2017 to April 2018, the MPC decided to retain all monetary policy instruments at their current levels; MPR at 14.0%, MPR Corridor at

• 500bps

and +200bps, CRR at 22.5% and Liquidity Ratio at 30.0%. ▪ Fixed income yields moderated slightly but remained elevated as a result of the continued tight monetary policy environment during the period. ▪ The introduction

• f

the Investor and Exporters (I&E) Window has stimulated foreign currency inflows, and moderated the pressure on the Naira. Whist the FX market remains fragmented, liquidity has improved and rates at the parallel market and I&E Window have converged around N360/USD. ▪ Most market participants, including portfolio flows, payments for services, dividend payments as well as demand for the import of finished goods continue to transact in the window. ▪ Headline inflation moderated for the 11th consecutive month to 13.34% in March 2018 as it continues to ease. The inflation rate was 15.13% in January 2018. ▪ Food inflation remains drops to 16.08% from 18.92% in January, due partly to the increase in security across Nigeria. ▪ Core inflation has however been relatively subtle, reaching its lowest at 11.2% in March 2017, as improved foreign currency liquidity moderates the rise in non-food consumer good prices.

OPERATING ENVIRONMENT CONT’D

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3

FINANCIAL OVERVIEW

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Financial Metric (N' Billion) Q1 2018 Q1 2017 Change Turnover 1.01 0.65 +55% Operating Expenses (0.46) (0.25) +89% Profit Before Taxation 0.54 0.40 +35% Profit After Taxation 0.46 0.38 +22% EPS (Kobo) 23 19 +21% Total Assets 22.66 21.93 +3% Total Liabilities 16.01 14.99 +7% Total Equity 6.64 6.94

• 4%

2018 FIRST QUARTER RESULT SNAPSHOT

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0.16 0.17 0.25 0.46 Q1 2015 Q1 2016 Q1 2017 Q1 2018 0.56 0.40 0.64 0.96 Q1 2015 Q1 2016 Q1 2017 Q1 2018

▪ Over the last 4 years (Q1), Africa Prudential grew gross earnings by 20% CAGR, leveraging on enhanced innovative offerings and efficient management of investment activities. ▪ Net Investment Income, which contributed 77% of Gross Earnings, reached its peak, driven largely by efficient management of investment activities. ▪ Operational Expenses increased by 89% year on year. This was largely due to technological advancement, business expansion, product development and other promotional activities Gross Earnings (N’billion) Break Down of Gross Earnings (%) Operating Expenses (N’billion)

…INCREASING EARNINGS

Page|14 30% 37% 33% 23% 70% 63% 67% 77% Q1 2015 Q1 2016 Q1 2017 Q1 2018 Professional fee Income Net Investment Income

17.7 16.8 21.93 22.66 FY 2015 FY 2016 FY 2017 Q1 2018 0.37 0.19 0.38 0.46

Q1 2015 Q1 2016 Q1 2017 Q1 2018

0.40 0.24 0.40 0.54 Q1 2015 Q1 2016 Q1 2017 Q1 2018

▪ Profit Before Tax grew 11% CAGR over the last 4 years representing a strong momentum in terms of profitability. ▪ The Company recorded an impressive 22% year on year Profit After Tax to N0.46billion, representing the highest profit in the 4-year period. ▪ The Company’s Total Assets grew by 3.31% YTD, buoyed majorly by cash and cash equivalents. Profit Before Tax (N’billion) Profit After Tax (N’billion)

STRONG PROFITABILITY

Total Assets (N’billion)

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19 10 19 23 Q1 2015 Q1 2016 Q1 2017 Q1 2018 66% 48% 58% 46% Q1 2015 Q1 2016 Q1 2017 Q1 2018

▪ The Return on Assets (ROA) remained stable at 2.0% YTD. ▪ Q1 2018 Return on average Equity was 7%, up 200bps YTD. ▪ Earnings Per Share also increased to 23 Kobo in Q1 2018 as a result of the strong profitability momentum. Return on Asset & Equity (%) EPS (Kobo) Profit Margin (%)

KEY RATIOS

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Not annualized

2.0% 5% 2.0% 7% ROA ROE FY 2017 Q1 2018

4.6 4.6 6.94 6.64 FY 2015 FY 2016 FY 2017 Q1 2018 13.1 12.3 14.99 16.01 FY 2015 FY 2016 FY 2017 Q1 2018

▪ The company’s total assets grew by 3.31% YTD, buoyed majorly by cash and cash equivalents. ▪ Total shareholders funds declined 4% YTD due to increase in dividend paid. ▪ The Company’s total liability increased marginally by 6.8% YTD representing a stable liability management Shareholders Fund (N’billion)

BALANCE SHEET SNAPSHOT

Total Assets (N’billion)

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Total Liabilities (N’billion)

17.7 16.8 21.93 22.66 FY 2015 FY 2016 FY 2017 Q1 2018

4

2018 OUTLOOK & KEY TAKEAWAY

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2018 OUTLOOK

Gross Earnings

N0.96Bn

1 Professional Fee Income

N0.22Bn

Net Investment Income

N0.73Bn

Profit Margin

46%

Return On Equity

7%

Return On Assets

2%

Operating Expense

N0.46Bn

2 3 4 5 6 7

Q1 2018 Actual 2018 Guidance

55% 32% 9%

N1.4Bn N3.8Bn N1.3Bn N2.3Bn 25% 17% 32% 84% 22% 22% 33%

% of Guidance

KEY TAKEAWAY

Despite tight regulatory directives, the Company continues to post strong results with an impressive 77% of gross earnings from non-registrar fees Strong technological capabilities, serving over 70 clients with 3 million shareholders First and only listed Registrar firm in Nigeria with ambitions to grow into the African Market A dedicated and experienced management team with proven track record

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5

APPENDIX

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In thousands of Nigerian Naira 31-Mar-18 31-Mar-17 Registrars fee income 223,550 214,751 Net investment income 734,254 426,795 Gross earnings 957,803 641,546 Other income 47,972 6,028 Impairment loss on financial assets (24,700) (25,000) Personnel expenses (112,443) (76,670) Other operating expenses (112,144) (130,418) Depreciation and amortization (18,567) (13,159) Finance charges (186,245)

• Profit before tax

541,676 402,327 Income tax expense (80,778) (24,647) Profit after tax 460,898 377,680 Other Comprehensive Income, net of income tax Items that will not be reclassified subsequently to profit or loss:

• Items that may be reclassified subsequently to profit or loss:

Fair value gain on quoted equity 43,455

• Fair value gain/(loss) on unquoted equity
• Other comprehensive income, net of income tax

43,455

• Total comprehensive income

504,352 377,680 Basic earnings per share (kobo) 23 19

INCOME STATEMENT

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In thousands of Nigerian Naira 31-Mar-18 31-Mar-17 ASSETS Cash and cash equivalents 10,586,880 9,192,490 Financial assets (Available For Sale) 4,483,898 4,440,443 Financial assets (held to maturity) 6,515,882 7,554,522 Trade and other receivables 258,564 257,107 Inventory 16,578 16,578 Other assets 391,281 72,070 Property, plant and equipment 238,018 223,683 Intangible asset 81,390 77,921 Goodwill 73,993 98,693 TOTAL ASSETS 22,656,484 21,933,507 LIABILITIES Customers' deposits 10,355,188 10,792,264 Creditors and accruals 238,067 330,913 Taxation 287,460 224,407 Deferred tax assets 34,110 34,110 Current liabilities 10,914,825 11,381,694 Loan 5,097,821 3,612,328 TOTAL LIABILITIES 16,012,646 14,994,022 SHAREHOLDER’S EQUITY Share capital 1,000,000 1,000,000 Share premium 624,446 624,446 Retained earnings 4,547,550 4,886,652 Other reserves 471,842 428,387 TOTAL EQUITY 6,643,838 6,939,485 TOTAL LIABILITIES AND EQUITY 22,656,484 21,933,507

STATEMENT OF FINANCIAL POSITION

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Contact Investor Relations Email: investorrelation@africaprudential.com Tel: +234 703 210 0628

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QUESTIONS?

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