TransCentury Gro oup An Overview INVESTING IN AFRICA Executive - - PowerPoint PPT Presentation

TransCentury Gro

An Overview

INVESTING IN AFRICA

• up

Executive Summary

T C Li i d (“TCL”) i K h d

• Trans-Century Limited (“TCL”) is a Kenya–headqu

across East, Central & Southern Africa

−

Operating profit of circa KES 1.6 billion Total assets of circa KES 20 billion

−

Total assets of circa KES 20 billion

• Industry sectors include: Power Infrastructure - T

T t I f t t Rift V ll R il Transport Infrastructure - Rift Valley Railways;

• Uniqueness of TCL:

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Founded by entrepreneurial Kenyan busines investors

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Focus on power infrastructure, transport inf engineering

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Subsidiary operating companies led by dyna with extensive experience & in-depth except

• TC investment view:
• African markets display under-penetration &

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Poor service delivered expensively to to

• Opportunity to build scale businesses that be

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Focus on strong cash generation and ca d i f i h i uartered infrastructure group with investments Tanelec, Kewberg, EA Cables, Cableries Du Congo; d E i i Ci i A and Engineering - Civicon, Avery

• Entrepreneurial

ss people and frastructure and

Entrepreneurial

• Infrastructure

focus

amic management tional capabilities

focus

• Ability to execute

& inefficiency, particularly infrastructure

• o few people

enefit from market inefficiencies apital gains

1

Tra

TCL’s industry focus

Power infrastructure Transport infrastructure Divisions: Existing

• E.A.Cables – manufacture
• Rift Valley Railwa

Existing investments: aluminium & copper cable

• Tanelec – transformers,

switchgear etc

• Kewberg - specialty cables

manufacturer CDC f Kenya Uganda railw concession

• CDC – manufacture copper

cables Focus:

• Electricals Consolidation:

consolidation of current power

• Rift Valley Railwa

recapitalization of consolidation of current power infrastructure assets

• Power Generation &

Transmission Opportunities p Uganda rail Power Transport1 H1 2012 Revenues: (KesM)

3,567 1,056

Note: 1. Total revenues do not include TCL’s share of RVR revenues, which are not consol

ans-Century Ltd

Affiliated holdings Engineering g ays-

• Civicon – civil, mechanical

Chai Bora- tea blender & way engineering, craneage & erection and logistics, oil & gas EPC services

• Avery – Weigh Bridges,

generators, bearings, sub- packager

• Development Bank of

Kenya- complimentary banking services

• Karen Mall- property for

stations ays: f Kenya

• Engineering & Contracting:

specialised engineering & development

• Fund of Funds

y specialised engineering & contracting Engineering Other Total 1

3,063 434 7,064

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lidated in TCL financials

Geographical Presence & Dis

Presence & Distribution Presence in 14 countries across East, Central and Southern Africa 8 factories and a vast distribution network across these countries Physical presence bolstered by cross border Physical presence bolstered by cross-border trade into neighbouring countries

tribution

Market Presence

3

Investment considerations

• Strong fundamentals in target markets of Power

Strong fundamentals in target markets of Power

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Under penetration of power sector with stro

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Various economies in the region are experien for cargo logistics solutions

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Regional oil & gas finds open numerous opp

• Strong market positioning

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Physical operations in 8 countries within Ea Uganda, Tanzania, Rwanda, South Sudan DR

• Leveraging scale for execution

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Strong balance sheet with shareholder funds

• Strong management teams with deep hands-on

incentivized by an entrepreneurial board

• Impressive financial performance

–

Average revenue growth of 26% over the pa growth growth

–

H1 2012 turnover growth of 56% and six-fol r and Transport Infrastructure as well as Engineering r and Transport Infrastructure as well as Engineering

• ng commitments from utilities

ncing growing cargo traffic and consequently demand

• rtunities for engineering & contracting

ast, Central and Southern Africa; including Kenya, RC, Zambia and South Africa s of KES 11.6 billion experience in operations, strategy and execution; ast 5 years, driven by strategic acquisitions & organic ld earnings growth for the same period

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Power

Under-penetration of Regional Electrification Under-penetration of Regional Electrification

Description Leading power cable manufacturer with 5 plants in East and Central Africa Predominant manufacturer of transformers and switchgear in East and Central Africa Investment in tripling of capacity across power division 2011 divisional revenues: USD 89mm

n

Products

n

– Copper house wires – Interior data cables – Specialty cables p y – Aluminum conductors

d

– Transformers

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– Switchgear

Fundamentals: strong growth

Power

Fundamentals: strong growth

Cement and Electricity Consumption

1.8 3.1mt 3.4mt 3.2mt 3.6mt 2.1

CAGR:

1.3 1.5 2.1mt 2.2mt 2.7mt 1.6mt 2.0mt 2.4mt 2.8mt 1.3 1.7

tomers (Millions) consumption

• nnes)millions

CAGR: 13%

consumption n millions)

0.9 1.1 0 0mt 0.4mt 0.8mt 1.2mt 0 5 0.9

KPLC cust Cement (Metric t

KPLC customers Cement Consumption

CAGR: 18%

Cement (MT in

Power Generation Capacity

0.0mt 0.5 2007 2008 2009 2010 2011

Source: KPLC &KNBS 1,471 1,589 1,500 1,600 1,700

ty (MW)

CAGR: 7%

1,197 1,310 1,361 1 100 1,200 1,300 1,400

Installed Capacit

1,000 1,100 2007 2008 2009 2010 2011

I

Source: KPLC

Market potential: still underserved

Electrification Rate: % of population

Kenya

Market potential: still underserved

25%

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Uganda Tanzania

14% 9%

4 5

USA Ghana South Africa

75% 61%

2 3

USA

Source: UNDP

Installed Capacity (MW)

100%

1

1,570 1 095 570

1,589

Kenya Uganda Tanzania

39,000 2,085 1,095 39,000

Tanzania Ghana South Africa

1,078,000 Source:UNDP

USA 6

Transport

Congestion on the Northern Corridor Congestion on the Northern Corridor Description

Awarded a 25 year Kenya & Uganda railway concession which includes the management

• f :

2 800 km of track – ~2,800 km of track – ~100 locomotives – ~4,000 wagons

• 2011: Initiation of RVR strategic turnaround

g plan resulting in increased volumes and reduced operating costs

Growth Story Growth Story

• Strong market fundamentals

– 20mm tones of cargo at Mombasa Port R il h ld b h th d f – Rail should be cheaper than road for homogenous point-to-point cargo

• America Latina Logistica as the technical

partner partner

• Strong financial partners

– Equity partner is a strong African private equity player; key lenders from DFI equity player; key lenders from DFI community

Assets

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Fundamentals Remain Strong: Tran

19 20 20 25

Mombasa Port Evacuation

7 8 13 4 8 10 15

MT in Millions

4.8 2.5 2 1.5 1.6 5 1980's 1990's 2000's 2010 2011

M

Port Volume RVR

Turnaround Plan

There is an opportunity to quickly increase capacity of RVR with relatively limited capital outlay by: V t e at e y ted cap ta out ay by – Managing selective upgrade of the permanent way – Managing upgrade of locomotives and wagons to improve availability p y – Managing purchase of new/refurbished locomotives – Reducing operating costs by focusing on fuel and labor costs labor costs – Working with ALL technicians to re-establish efficient operations

nsport Infrastructure

Containerised Cargo Growth

771 750 800

s)

CAGR:

616 619 696 600 650 700

go (TEUs 000's

CAGR: 8%

500 550 2008 2009 2010 2011

Carg

Progress to Date

• All equity injected
• 1st material debt drawdown completed 2nd at
• 1 material debt drawdown completed, 2

at year end

• 70km of rail being installed
• Locomotive rehabilitation underway
• Hiring of C-suite complete
• Key material cargo being transported:

– Mombasa – Kampala, refined petroleum Mombasa Nairobi container cargo

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– Mombasa – Nairobi, container cargo – Mombasa – Kampala, crude palm oil and cereals – Athi – Kampala, cement

Engineering

Description Description

Leading engineering contractor in Eastern Africa Dynamic management, engineers and technicians with over 30 engineers and 2,000 staff Large asset base boasting over 350 pieces of heavy equipment y q p 5 fully equipped workshops across Eastern Africa 2011 divisional revenues: USD 23mm

Growth Story

Underlying market dynamics in Power and Underlying market dynamics in Power and Transport markets – Regional efforts in oil & gas exploration, power generation power transmission power generation, power transmission, roads & bridges General growth of economy provides for funding for capital expenditure within industrial sector

Products/Services Products/Services

Pipelines & piping Marine vessels

Business focus Mechanical Engineering

Geothermal steam-fields Tankage Roads & bridges

Roads & bridges

Piling Well pads Plant hire

Civil Engineering Plant hire

Mining services Heavy loads Specialised cargo Specialised cargo Off road haulage Temporary camps/offices Camp construction

Logistics

Camp construction Steel erection Craneage

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Craneage & Erection

Craneage Heavy lift

Engineering Division: selecte

CASE STUDY #2: VTTI, KENYA (in construction)

• EPC contract to construct a 113,000 cubic meters

AGO storage and loading facility. This includes:

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Piling and civil works

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Building 10 tanks up to 14,200 square meters

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8 truck loading gantries and all requisite piping

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Fire fighting tank and foam system

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Office and control room Office and control room

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Instrumentation and commissioning

ed case studies

CASE STUDY #1: L. KIVU, RWANDA (ongoing)

• Civicon is undertaking a methane gas extraction

project on Lake Kivu with ContourGlobal.

• This turnkey project involves:

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Construction of a 750 tonne barge g

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Target to provide 25MW in the next 1.5 years and 100MW in 4 years

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H1 2012 Financial Highlights

Revenue

4,534 7,064

Millions

CAGR: 56%

H1 2011 H1 2012

Ksh M

Operating Earnings

997

lions

CAGR: 147%

404

Ksh Mill

147%

H1 2011 H1 2012

s

Total Assets

15,278 19,565

Millions

CAGR: 28%

H1 2011 H1 2012

Ksh M

Shareholders Funds

8,603 11,637

lions

CAGR: 35%

H1 2011 H1 2012

Ksh Mill 11

H1 2011 H1 2012

H1 2012 Performance

Income Statement

Kshs millions H1 2012 H1 2011 Var (% ) Turnover 7,064 4,534

56%

Profit from operating activities 997 404

147% i % margin % 14.1% 8.9%

Net finance costs (433) (238)

• 81%

Profit before income tax 564 165 241% margin % 8 0% 3 6% margin % 8.0% 3.6% Income tax expense (238) (111)

• 113%

Profit for the period 326 54 505% margin % 4 6% 1 2% a g % 4.6% 1.2% Attributable to: Equity holders 82 (31) 365% Minority interest 244 85 187% Profit /(Loss)for the period 326 54 505%

Balance Sheet

Kshs millions H1 2012 H1 2011 Var (% ) Assets Non-current assets 12,899 7,421

74%

Current assets 6,666 7,857

• 15%

Total assets 19 565 15 278 28% Total assets 19,565 15,278 28% Equity and liabilities S hare Capital 137 134 3% Reserves 4,318 3,874 11% Non-controlling interest 2,832 1,437 97% Convertible bond 4,350 3,158 38% Non-current liabilities 4,206 2,895 45% Current liabilities 3,723 3,780

• 2%

Total equity and liabilities 19,565 15,278 28%

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Contact Us

www transc www.transc century co ke century.co.ke

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