TransCentury An Overview

INVESTING IN AFRICA • TCL Overview

• Divisional Overview

• 2012 Financial Performance

• The Team

1 Executive Summary

• Trans-Century Limited (“TCL”) is a Kenya–headquartered infrastructure company with operations across East, Central & Southern Africa − Operating profit of over US$ 20 million − Total assets of circa US$ 250 million • Industry sectors include: Power Infrastructure, Transport Infrastructure and Engineering

• Uniqueness of TCL: − Founded by entrepreneurial Kenyan business people and Entrepreneurial investors

− Focus on power infrastructure, transport infrastructure and Infrastructure focus engineering − Operating companies led by dynamic management with extensive experience & in-depth exceptional capabilities Ability to execute • TCL investment view: − African markets display under-penetration & inefficiency, particularly infrastructure • Poor service delivered expensively to too few people − Opportunity to build scale businesses that target existing market inefficiencies • Focus on strong cash generation and capital gains

2 TransCentury’s Industry Focus

TransCentury Ltd

Power infrastructure Transport infrastructure Engineering

• E.A.Cables – manufacture • Rift Valley Railways:- Kenya • Civicon – Civil, mechanical aluminium & copper cable Uganda railway concession engineering, cranage & • Tanelec – transformers, erection and logistics switchgear etc • Avery – Weigh Bridges, • Kewberg - specialty cables generators, bearings, sub- manufacturer stations

Subsidiaries • CDC – manufacture copper cables

• Consolidation of power business • Turnaround Project: • Engineering & Contracting: under “TCL Power” umbrella Recapitalisation and specialised engineering & • Power Generation & Transmission rehabilitation of the Kenya- EPC contracting for the Oil & Focus Opportunities Uganda railway Gas, Power and Mining sectors

2012 Power Transport Engineering Other Total1 Revenues: US$ Millions 78.4 74.7 78.7 (0.4) 156.8

1 Total revenues do not include TCL’s share of RVR revenues, which are not consolidated in TCL financials 3 3 Historical timeline

Dec 2010 TCL acquires a 100% stake in CDC

September 2007 June 2011 TCL acquires a TCL acquires an 70% stake in 80% stake in Tanelec Pende

April 2005 Feb 2004 Dec 2006 August 2007 October 2011 TCL acquires TCL Acquires TCL acquires TCL acquires a TCL acquires a a 94% stake a 64% stake a 34% stake 100% stake in majority stake in in Avery in EA Cables in RVR Kewberg. Civicon Africa Ltd

1996 2000 2004 2008 2012

2006 April 2009 March 2011 July 2011 1997 Engagement of Shares of TCL Issue the first ever TransCentury lists Incorporation of full time begin trading on listed convertible on the Nairobi TransCentury Ltd management Over The Counter Eurobond by an Stock Exchange team market East African issuer

4 Geographical presence and distribution

Tunisia Market presence

Morocco

Algeria Libya Egypt

Mauritania

Mali Niger Senegal Eritrea Chad Sudan Djibouti Gambia Sudan Guinea Bissau Burkina Guinea Nigeria Somalia Ethiopia Sierra Leone Ivory Coast South Sudan Liberia Central African Republic Cameroon Benin Ghana Equatorial Democratic Uganda Guinea Republic of Kenya Togo Gabon Congo Rwanda Congo Burundi

Tanzania Presence and distribution Mozambique Angola

Malawi • Presence in 14 countries across East, Central and Zambia Southern Africa

Zimbabwe • 8 factories and a vast distribution network across Namibia this region Botswana Madagascar • Physical presence bolstered by cross-border trade Swaziland into neighbouring countries Lesotho

South Africa

5 Historical performance

Revenue EBITDA

$30m CAGR: $157m CAGR: +31% +14% $126m $23m $21m $19m $18m $83m $84m $14m $15m $67m $71m

$31m

Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Net assets value Total Assets

$140m $264m CAGR: $130m CAGR: $254m +35% +33%

$139m $66m $120m $115m $104m $46m $46m $40m $23m $46m

Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 6 Investment considerations

• Strong fundamentals in target markets of Power and Transport Infrastructure as well as Engineering − Under penetration of power supply with strong commitments from utilities and IPPs − Regional economies are experiencing growing cargo traffic and consequently demand for cargo logistics solutions − Regional oil & gas finds open numerous opportunities for infrastructure development and engineering services • Strong market positioning − Physical operations in 8 countries within East, Central and Southern Africa; including Kenya, Uganda, Tanzania, Rwanda, South Sudan DRC, Zambia and South Africa • Leveraging scale for execution

− Growing balance sheet with shareholder funds of US$ 140.6 million • Strong management teams with deep hands-on experience in operations, strategy and execution; incentivized by an entrepreneurial board • Impressive financial performance − Average revenue growth of +30% over the past 6 years, driven by strategic acquisitions & organic growth − 2012 revenue growth of 26% and 14% growth in EBITDA for the same period

7 • TCL Overview

• Divisional Overview

• 2012 Financial Performance

• The Team

8 Power division

Under penetration of electricity across Africa Despite recent strong growth, the sector is still underserviced Fundamentals: Strong growth Market potential: Still underserved Cement consumption and electrification Electrification rate: % of population MT 4.2 3.9mt 2.5 CAGR: 3.9mt Kenya 25% 3.8 16% 2.1 3.4 3.1mt Uganda 9% 2.0 3.0 2.7mt 1.8 1.7 Tanzania 14% 2.6 2.2mt 1.5 CAGR: 1.3 2.2 17% Ghana 61% 1.3 1.8 1.1 Cement consumption 0.9 South Africa 75% KPLC CustomersKPLC (millions) 1.4 CustomersKPLC (millions) KPLC customers 1.0 0.5 USA 100% 2008 2009 2010 2011 2012 Source: KPLC and KNBS Source: UNDP

Power generation capacity Installed capacity (MW)

1,800 1,691MW Kenya 1 691 1,700 CAGR: 1,589MW 1,600 7% Uganda 570 1,500 1,471MW Tanzania 1 095 1,400 1,361MW 1,310MW 1,300 Ghana 2 085 1,200 Installed capacity MW capacity Installed South Africa 39 000 1,100

1,000 USA 1 078 000 2008 2009 2010 2011 2012 Source: KPLC Source: UNDP 10 Power division overview

Leading East Africa electrical components Description manufacturer • Through the power division, TCL is a leading • Leading power cable manufacturer with 5 plants in manufacturer of electrical cables, conductors and East and Central Africa, through EAC and CDC electrical equipment • Predominant manufacturer of transmission equipment • The division operates through 8 factories across in East and Central Africa, through Tanelec East, Central and Southern Africa • Leading manufacturer of specialised cables in East, • Consolidation of the power division operations Central Africa and Southern Africa, through Kewberg ongoing under the “TCL Power” umbrella to unlock • Leading manufacturer of low and medium voltage the businesses’ inherent value switch gear through Tanelec • The division had revenues of US$ 78.4 million in 2012

Products The brands • Key products for the power division include: − Copper house wires − Armoured cables − Switch gear − Specialty cables − Aluminum conductors − Transformers − Generators

11 Product overview

Power Division

Contracting Cables Transformers Switchgear Generators Projects

• Overhead • Distribution • Low voltage • SDMO Generators • Distribution & Conductors transformers Switchgear • Power Source Transmission • Power & Control • Power • Medium voltage • Yor Power Lines Cables transformers Switchgear Generators • Substations • Specialty & • Transformer • Automation & • Renewable energy Design Cables Servicing Control Products • Unitised • Building Wire • Installation, substations

Products: • Data & commissioning Communication and maintenance • Instrumentation & Control Cables • Mining Cables

12 TCL’s participation in the power sector

Power generation Transmission lines

• Power generation is a key • Exclusive distributors of HV • Construction of growth area for TC and MV cables and Substations conductors for LS Cable and Nexans

Residential/commercial Distribution lines use

• Manufacture of exterior • Manufacture of LV cables • Manufacture of power cables • REA approved power line distribution transformers • Manufacture of interior contractor house wire cables

13 Geographical presence

Tunisia NBO, Kenya Morocco • Copper – house wires • Copper – armored cables Algeria • Aluminum conductors Libya Egypt • Data Cables

Arusha, Tanzania Mauritania • Transformers Mali Niger • Switchgear Senegal Sudan Eritrea Chad Djibouti Gambia Guinea Bissau Burkina Guinea Somalia Nigeria Ethiopia DAR, Tanzania Sierra Leone Ivory Coast • Copper – house wires Liberia Central African Republic • Copper – armored cables Cameroon Benin • Aluminium conductors Ghana Equatorial • Enamel winding wire Togo Guinea Uganda Kenya Gabon Democratic Republic of Rwanda KINSHASA, DRC Congo Congo Burundi Tanzania • Copper – house wires • Copper – armored cables

Mozambique Angola

Malawi Zambia KITWE, Zambia • Turnkey electrical projects Zimbabwe • Electrical Engineering/ Namibia products Manufacturing plants Botswana Madagascar • Industrial Products

Countries covered by: Swaziland JHB, South Africa Operating Companies Lesotho • Speciality cables – instrumentation, mining and Sales offices/agents South Africa control cables

14 Transport division

Congestion along East Africa’s main transport corridor Transport overview

Description Our Partners • Owns 34% stake in Rift Valley Railways (RVR) • Our equity and technical partners include: through its transport division • Awarded a 25 year Kenya & Uganda railway concession which includes the management of: − ~2,800 km of track Our Lenders include: − ~100 locomotives • − ~4,000 wagons • In 2012,RVR hauled 1.6 million tons of cargo

Opportunity Assets • Has exclusive use of the Kenya & Uganda railway through the concession agreement • Strong market fundamentals − 20mm tons of cargo at Mombasa Port − Rail should be cheaper than road for homogenous point-to-point cargo • Brazilian rail operator, America Latina Logistica, as the technical partner

16 Rail key to East African transport corridor

Mombasa Port Evacuation

25 Port volumes

RVR ~20.0 20 19.0

15 13.0 As port volumes rose, railway volumes continued 10 their consistent MT in Millionsin MT MT in Millionsin MT 8.0 decline 7.0

4.8 5 2.5 2.0 1.5 1.6

0 1980 1990 2000 2010 2012

Source: KPA, Kenya Railway Corporation and RVR estimates 17 Railway turnaround plan in progress

Turnaround plan Progress to date

• There is an opportunity to quickly increase • Over US$100m CAPEX invested towards the capacity of RVR with relatively limited capital turnaround programme outlay by: • Achieved 2nd debt drawdown in H1 2013 − Managing selective upgrade of the permanent way − 1st debt drawdown completed in Dec 2011

− Managing upgrade of locomotives and wagons • Rail replacement program more than 50% to improve availability complete

− Managing purchase of new/refurbished • Locomotive rehabilitation and overhaul underway locomotives • C-suite management re-structuring completed − Reducing operating costs by focusing on fuel • Key material cargo: and labor costs ‒ Mombasa Kampala: refined petroleum − Working with all technical partners to re- establish efficient operations − Athi River Kampala: cement

• CAPEX of US$287mm to be financed with a mix − Mombasa Nairobi: containers of US$164mm in debt, US$82mm in equity and the remainder through generated cash flows − Mombasa Kampala: crude palm oil and cereals

18 Transport: The rail network

USD 300 million capex invested towards turn-around initiative

South Sudan Ethiopia ~2,800 km of track ~100 locomotives ~4,000 wagons

DRC Pakwach

Uganda Tororo ~ 20 million tonnes Kampala Kenya of cargo at port <10% moved on

Kasese rail Nairobi

Partners Rwanda Lamu

Burundi

Mombasa Tanzania

Rail Network Oil Fields Mining

19 Engineering division Engineering overview

Description Product/services • TCL, through its engineering division is the leading Business focus engineering contractor in Eastern Africa • Pipelines & piping • Dynamic management, engineers and technicians • Marine vessels with over 30 engineers and 2,000 staff • Geothermal steam-fields • Large asset base boasting over 350 pieces of heavy • Tankage equipment Mechanical Engineering • 5 fully equipped workshops across Eastern Africa • Roads & bridges • Piling • Well pads • Mining services Civil Engineering Growth drivers • Heavy loads • Specialised cargo • Underlying market dynamics in Power and Transport Off road haulage markets • Camp construction − Regional efforts in oil & gas exploration, power • generation, power transmission, roads & bridges Logistics • General growth of economy provides for funding for • Pipelines & piping capital expenditure within industrial and the • Marine vessels infrastructure sector • Geothermal steam-fields • Tankage Cranage and erection 21 Geographical presence

Established Offices Selected projects in various Tunisia

Morocco Areas of Operations countries

Algeria CIVIL ENGINEERING Libya Egypt South Sudan:

Mauritania Road construction,

Mali Northern Sudan maintenance of 113 Niger Senegal Northern Sudan Eritrea Chad kilometers Yei Juba road Gambia Djibouti Guinea Bissau Burkina Guinea Nigeria Somalia Ethiopia MECHANICAL Sierra Leone Ivory Coast ENGINEERING Liberia Central African Republic Southern Sudan Cameroon Benin Ghana Equatorial Democratic Uganda Kenya: Kenya Guinea Republic of Congo Togo Gabon Construction of 48MW Rwanda Geothermal plant in Congo Burundi Naivasha Tanzania

Mozambique Angola LOGISTICS Malawi Zambia Uganda: Zimbabwe Namibia Transport of brewery Botswana vessels Madagascar

Swaziland

Lesotho CIVIL ENGINEERING South Africa CRANAGE & ERECTION

Congo: Rwanda: Mining services for a 5.6 Construction of a 25MW million ounce mine HFO plant in Kigali

22 Mechanical Engineering

Overview Case study #1: VTTI, Kenya (in construction) • Operations: Full EPC on complex steel structures • EPC contract to construct a 113,000 cubic meters • Past experiences: AGO storage and loading facility. This includes: − International sized tank farms − Piling and civil works − Petroleum pipelines − Building 10 tanks up to 14,200 square meters − Refinery upgrade and maintenance − 8 truck loading gantries and all requisite piping − Piping connection for power plants − Fire fighting tank and foam system − Steel erection − Instrumentation and commissioning − Rehabilitation and expansion of water treatment plants

Select projects • The Orpower III geothermal power plant with an installed capacity of 35MW • Solvochem tank farm expansion phase II • Wartsila thermal plant with an installed capacity of 120MW.

23 Civil Engineering

Overview Case study #1: UNOPS, South Sudan • Operations: Engineered concrete and civil works • Rehabilitation of Faraksika-Marridi-Ibba and provider in the most demanding geographies Yambio-Dabio Road South Sudan funded by • Past experiences: USAID and World Bank − Road repairs, maintenance and construction − 80 kilometer road rehabilitation of existing road − Mining services − Design and build a further 80 kilometers − Piling − First pre-designed murram road in South Sudan − Engineered concrete − Built to the Standard Technical Specification − Construction of bridges for Highway work 2006 USA − Construction of barges − Similar built constraints to other UNOPS roads

24 Logistics, Craneage and Erection

Overview Case study #1: Kenya Breweries, Kenya Craneage and Erection Logistics • Operations: Comprehensive service provider of • Operations: Full service provider for heavy, lifting solutions with a fleet of cranes ranging oversized and specialised loads from 14 tonnes to 260 tonnes • Complete turnkey job involving transporting four • Past experiences: brew vessels from Mombasa to Ruaraka − Steel erection − Vessel measurements: 20m long, 5.85m − Tank and piping installation diameter, 5.89m high − Fabrication, engineering and heavy − Single largest load trucked in Nairobi transportation − Vessels lifted from Civicon low loaders and − Factory installations and removal rotated to vertical position using 22m high gantry on rails

25 • TCL Overview

• Divisional Overview

• 2012 Financial Performance

• The Team

26 2012 performance highlights

Revenue EBIT

13.5bn 26% 22% 2.0bn 10.7bn 1.6bn

2011 2012 2011 2012

Gross profit Total assets

3.7bn 22.4bn -2.6% 3.0bn 21% 21.8bn

2011 2012 2011 2012

EPS DPS

1.66 0.40 26% 60% 1.32 0.25

2011 2012 2011 2012 Note: Figures in KES 27 Summary Financial Statements

Income Statement

Figures in KES millions 2012A 2011A % variance Revenue 13,487.2 10,701.6 26,0%

Gross profit 3,673.2 3,025.2 21,4% % of sales 27,2% 28,3%

EBITDA 2,613.3 1,942.6 34,5% % of sales 19,4% 18,2%

Operating profits 1,969.4 1,618.1 21,7% % of sales 14,6% 15,1%

Profit before income tax 1,226.5 869.3 41,1% % of sales 9,1% 8,1%

Profit after income tax 740.6 616.1 20,2% % of sales 5,5% 5,8%

Profit after tax is attributable to: Equity holders of the company 455.1 356.7 Non-controlling interest 285.5 259.4 Profit for the year 740.6 616.1

28 Summary Financial Statements

Balance sheet

Figures in KES millions 2012A Restated 2011A % variance PP&E 6,866 5,818 18% Other non-current assets 7,470 7,146 5% Total non-current assets 14,336 12,964 11%

Inventories 1,594 1,709 -7% Trade and other receivables 5,604 4,949 13% Other current assets 313 2,802 -89% Total current assets 7,510 9,460 -21%

Total assets 21,846 22,424 -3%

Loans 3,179 2,965 7% Other non-current liabilities 752 648 16% Total non-current liabilities 3,931 3,613 9%

Bank overdraft 355 264 27% Long-term loan – current portion 1,398 1,338 4% Creditors and accruals 3,883 5,715 -32% Other current liabilities 229 409 -44% Total liabilities 5,846 7,726 -24%

Shareholders equity 12,069 11,085 9%

Total liabilities and shareholders equity 21,846 22,424 -3%

Note: The prior period balance sheet restatement relates to a fair value adjustment for a subsidiary acquired in the prior year 29 • TCL Overview

• Divisional Overview

• 2012 Financial Performance

• The Team

30 TCL corporate team

Dr. Gachao Kiuna Yida Kemoli Chief Executive Officer Wambua Kimeu Group Head of Corporate Finance and • Corporate finance & Group Head of Finance Strategy strategy consulting • Capital markets (McKinsey) • Audit & Advisory (PwC) investment banking • PhD Biotechnology, BSc • Certified Public (JPMorgan), Africa PE Biochemistry Accountant (Kenya) experience (Actis) • Bcom finance • MEng in Chemical Engineering

Allan Munyua Mumo Muthengi Geoffrey Njue Division Principal, Power and Engineering Division Manager, Investor Realtions Group Internal Auditor • Business procurement, • Investment banking • Group audit experience at Financial management (Deutsche Bank) and Nestle and Industrial advisory private equity experience Promotion Services • Masters in settlement & • MBA (Harvard Business • CPA (Kenya) infrastructure School), BBA finance • BSc in Civil Engineering development, Bachelors of Architecture

Ng’ang’a Njiinu Rose Kinuthia Janet Wanjiku Division Manager, Engineering Internal Auditor Management and Financial Accountant • Financial analysis, • Audit senior(Ernst • Audit (Kenya Women planning & strategy &Young) Finance Trust) • Chartered Financial • Certified Public • Certified Public Analyst, MBA finance & Accountant (Kenya) Accountant (Kenya) investment management • Bcom accounting • Bcom finance

31 TCL Company Board of Directors

Board of Directors (8)

Peter Kanyago, MBS Zephaniah Mbugua, Chair Ngugi Kiuna

• Owner East Africa Courier • 30 years of • Vast corporate • CPA (K), MBA, Industrial entrepreneurship management experience management experience (industrial • Ex- Unilever chemicals)

− Directorship: Express Kenya, − Directorship: EAC (chair) P&A − Directorship: UBA bank, KIA Fedex, Otix, KEMSA, KTDA (EA), Flashcom, Zeniki Investments motors, JohnsonDiversey EA

Njeru Kirira Robin Kimotho Joseph Karago

• Tax and fiscal policy • Business advisory & • Experienced in administrator Consultancy regionally infrastructure development • Served various capacities (Eastern & Southern • Owner Karago & in Govt. Treasury Africa) Associates architects

− Directorship: KCB, KRA, Suntra − Directorship: Polaris International − Directorship: Sajo Ltd, Mcensal Investments, Phoenix Publishers (K), Sigona Golf Club Ltd, Kenya Children’s Home

Carol Musyoka Dr. Gachao Kiuna

• Extensive experience in • Corporate finance & banking & corporate strategy consulting finance (McKinsey)

− Directorship: Enablis (EA), Institute for Economic Affairs

32 Key people in our divisions

CEO Experience

• Dr.Gachao Kiuna • Corporate finance & strategy consulting (McKinsey) TransCentury • PhD Biotechnology, BSc Biochemistry

Power • George Mwangi • Over 12 years of experience in the Cable industry • Previously worked as CFO of East African Cables Cables • Certified Public Accountant, Certified Public Secretary

• Jose Miguel • Over 32 years experience working in the power and energy industry in emerging markets Transformers

Engineering • Nigel Horner • Over 30 years experience in the construction industry with the last 18 years focused on senior management at director level

Transport • Darlan De David • An Electrical Engineering graduate of the Federal University of Rio Grande do Sul, Brazil • A career spanning 11 years in the railway and logistics industry

33 Contact us

Dr. Gachao Kiuna Mr. Mumo Muthengi Chief Executive Officer Head of Investor relations Tel: +254 20 224 5350 Tel: +254 20 224 5350 +254 20 224 5232 +254 20 224 5232 +254 20 300 6327 +254 20 300 6327 Fax: +254 20 224 5253 Fax: +254 20 224 5253 Email: [email protected] Email: [email protected]

www.transcentury.co.ke 34