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