Investor Presentation - Second Quarter 2018 1 August 2018 | Cairo, - - PowerPoint PPT Presentation
Investor Presentation - Second Quarter 2018 1 August 2018 | Cairo, Egypt Table of Contents I. Macro Overview Economic Fundamentals Results in Perspective II. Consolidated Results Group Highlights Consolidated Income
1 August 2018 | Cairo, Egypt
Table of Contents
I. Macro Overview
II. Consolidated Results
III. Business Lines’ Performance
I. Macro Economic Update
4
Sources: CAPMAS, CBE
12.00 11.98 11.98 11.30 10.60 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Unemployment Rate (%)
The unemployment rate fell 140 bps y-o-y GDP growth continues to expand as government-initiated structural reforms pay-off.. .. Bringing unemployment down to 10.6% in Q1 2018 GDP growth recorded 5.3% for the fiscal year FY17/18 Leading the CBE to delay monetary easing until Q4 2018
Fuel price hikes averaging c. 45% implemented in Q2 2018 raised headline CPI to 14.4% in June from 11.4% in May 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
4.3 4.9 5.2 5.3 5.4 5.4 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 GDP growth (%)
17.1% 14.4% 13.3% 13.1% 11.4% 14.4%
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Headline CPI 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 Policy Rates
II. Consolidated Results
Leasing 48% Microfinance 24% Investment Bank and Holding 28%
Net Income By Business Line
Leasing 33% Investment Bank and Holding 67% EGP
85.8
mn
+88% y-o-y
EGP
161.3
mn
Total Revenues
EGP1.1bn
↑46% y-o-y
H1 2017 EGP 778.0mn
Net Operating Profit
EGP301.8mn
↑111% y-o-y
H1 2017 EGP 140.2mn
Operating Profit Margin
H1 2017 18.4%
Cost-income1 (%)
H1 2017 22.1%
Net Profit Margin
H1 2017 11.0%
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.
Annualized Return on
H1 2017 25.1%
6
H1 2017 H1 2018
7 Summary Consolidated Income Statement
EGP mn H1 2018 H1 2017 y-o-y Consolidated Revenue
1,13 132. 2.1 778. 78.0 45.5% Leasing 738.0 564.3
30.8%
Microfinance 140.1
Investment Bank and Holding 254.2 213.7
18.9%
Operating Expenses 830.3 643.7
30.8% Financing Cost 342.1 222.3 53.9%
266.1 240.5 10.7% People Cost & Other SG&A 222.1 171.9 29.2%
Net Operating Profit
301. 01.8 140. 40.2 2 110. 10.6% Net Operating Margin 26.7% 18.4%
Net Profit After Tax & Minority Interest
161. 61.3 85.8 88.0%
Results commentary
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
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 Q1 2018 as a result
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 161.3 mn in H1 2018, representing an annualized ROAE1 of 27.3%.
1. ROAE calculation is normalized for one-off IPO transaction related expenses and calculated using weighted average equity during the period.
8 Summary Consolidated Balance Statement Result commentary
EGP mn H1 2018 H1 2017
PP&E 114.0 104.6 Goodwill 348.8 23.0 Finance Leased Assets, net 6,194.5 4,580.8 Securitization Difference, net 214.6
(917.3) (467.9)
Non-Current Assets 5,954.5 4,240.5 Cash and cash equivalents 1,222.2 593.1 Debit Clients 1,464.9 875.0 Clearing Accounts - Debit 85.2
104.0 159.6 Current Assets 2,876.3 1,627.6 Total Assets 8,830.9 5,868.1 Paid-in capital 544.2 311.5 Retained earnings 563.8 347.3 Share premium reserve 861.3
65.2 59.6 Shareholders’ Equity (Parent Company) 2,034.5 718.4 Shareholders’ Equity (Non-Controlling Interest) 101.4 119.5 Total Shareholders’ Equity 2,135.9 837.9 Long Term Loans and Facilities 4,081.9 3,137.6 Other Long Term Liabilities 142.3 37.8 Non-Current Liabilities 4,224.2 3,175.4 Short Term Loans and Facilities 1,424.3 868.4 Credit Customers 535.4 435.4 Other Short Term Liabilities 511.1 551.0 Current Liabilities 2,470.8 1,854.9 Total Liabilities & Equity 8,830.9 5,868.1
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. 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
grew y-o-y due to the Group’s acquisition of Reefy in December 2017. Shareholder Equity to Parent grew 183% y-o-y given the successful completion of the initial public offering
was followed by a c. 1 bn capital increase, of which EGP 861.5mn is classified under the share premium reserve.
II. H1 2018 Business Lines’ Performance
Total Outstanding Leased Portfolio Interest Income – EGP mn
Microfinance 24% Leasing 48% Holding & IB 28%
10
largest corporates in 12 distinct economic sectors Net interest margin (NIM)
Market share1
Key y Growth th Driv ivers
New bookings
EGP1.67bn
+ 61% y-o-y
Leasing Revenue – EGP mn Contribution to Net Profit
290.3 382.2 564.3 738.0
Q2 2017 Q2 2018 H1 2017 H1 2018 Interest income grew 37% y-o-y
portfolio Corplease’s leased portfolio grew 28.3% y-o-y as economic recovery continues
4.1 5.3
H1 2017 H1 2018
1. As of the latest publically available data published Financial Regulatory Authority (FRA) report for Q1 2018.
284.7 390.6 H1 2017 H1 2018
Total Microfinance Loans Outstanding Interest Income – EGP mn
Microfinance 24% Leasing 48% Holding & IB 28%
11
Operating profit margin
Number of active borrowers
+ 63% y-o-y
Key y Growth th Driv ivers
Number of branches
+ 9 branches y-o-y
Microfinance Revenue1
Contribution to Net Profit
27.1 75.2 51.7 140.1
Q2 2017 Q2 2018 H1 2017 H1 2018 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
48.9 135.5
H1 2017 H1 2018
269.5 596.3
H1 2017 H1 2018
1. Microfinance revenues were not consolidated prior to 2018
Microfinance 24% Leasing 48% Holding & IB 28%
Revenue By Line of Business
71.5 113.5 196.2 229.2
Q2 2017 Q2 2018 H1 2017 H1 2018
Investment Bank OPEX Holding and IB represented 28% of net profit Investment Bank Revenue – EGP mn
Asset Management - AUM’s
EGP8.3bn
+ 14% stocks y-o-y
1. Market Share is for transactions on the main market excl. deals. Source: EGX
12
Brokerage - Market Share1
+ 80 bps y-o-y IB Advisory - Revenue
EGP54.3mn
+ 137% y-o-y Research - Stocks Covered
+ 8 stocks y-o-y
Key Pe Perfo rformance Ind ndica cato tors
brokerage, asset management, investment banking advisory and custody to clients worldwide
Financing Cost 24% People Cost & Other SG&A 76%
134.8 20.4 54.3 19.6 229.2
Brokerage Asset Mgmt. IB Advisory Capital Markets and Treasury 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 Research: Brokerage:
81 91 90 102 '15 '16 '17 '18
continues to expand, bringing coverage to 102 stocks covering 6 MENA markets
continues to provide key market insights through top-quality reports, earning the CI Capital the 3rd spot in Extel’s 2018 MENA Research Survey
Coverage Universe Awards
3rd Place Extel’s 2018 MENA Research Survey
Total
45 35 17 2 1 2 102
market-leading brokerage services through CIBC and Dynamic, giving CI Capital a aggregate H1 2018 market share of 10.8%, 80 bps higher y-o-y.1
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 Nationaloty2 CI Capital H1 Trading Value3
17.3% 21.9% 6.4% 8.9% 4.6% 12.4% H1 2017 H1 2018 Foreign Local Arab
Value traded by CIBC grew 37% outpacing the market’s 26% growth
25.8 35.3
H1 2017 H1 2018
EGP bn
1. Performance measured on a YTD basis. Source: EIMA
14 Investment Banking Advisory: Asset Management (CIAM):
arm executed 2 deals with an aggregate value of c. EGP 2.6 bn during Q2 2018
pipeline of M&A and ECM transactions to be executed
EGP GP 1,737 737mn mn Advisory on Initial Public Offering Global Co-ordinator and Bookrunner 2018 EGP GP 881 881mn mn Advisory on Sale of 100% Stake in Exclusive Sell-side Financial Advisor 2018
Recent Transactions
grow its overall AUMs through a 52% rise in equity AUMs as the CBE maintains restrictions
division continues to
classes
7.3 8.3 2.5 3.8 4.8 4.5
30-Jun-17 30-Jun-18 (EGP bn)
MM & FI Funds & Portfolios Equity Funds & Portfolios 16.0% 22.1% 9.2% 8.6% 10.2% 7.0%
Balanced Equity FI & MM CIAM Peers Average Assets Under Management CIAM’s fund performance vs peers’
15
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. IR Contacts +20 (02) 3331 8154 Investor.relations@cicapital.com CI Capital Holding, 64-66 Mohie El Din AboulEzz St., Dokki, Egypt Share Information Ticker: CICH.CA; CICH EY Listed: 30th April 2018 Shares Outstanding: 544.18mn
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
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
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