2018 2018 THIRD QUARTER THIRD QUARTER PRESENTATION TO - - PowerPoint PPT Presentation

2018 THIRD QUARTER PRESENTATION TO INVESTORS & ANALYSTS 2018 THIRD QUARTER PRESENTATION TO INVESTORS & ANALYSTS

OUTLINE

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Section Page 1 Africa Prudential Overview 03 2 Operating Environment 07 3 Financial Overview 09 4 2018 Outlook 14 5 Appendix 16

1

AFRICA PRUDENTIAL OVERVIEW

FUNDAMENTAL STATISTICS

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Diversified business lines broadening revenue streams First and only registrar firm listed on the Nigerian Stock Exchange Ranked No. 1 in technology and innovation among corporate registrars

70

Over Clients

Manages 83 client registers, made up of

• ver 3million

shareholders

4

N

Shareholders Fund of N7.43billion,higher by 7% YTD Africa Prudential is strategically located in the commercial capital of Nigeria, Lagos; the political capital, Abuja; and Port-Harcourt.

2

Total revenue: N2.58billion, compared to N2.27billion in Q3 2017 (14% YoY growth). Profit Before Tax: N1.62billion, an impressive 11% YoY growth compared to Q3 2017. 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.

1 3

OUR JOURNEY SO FAR…

Page|5 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

 Projected gross earnings of N10billion  Implementation of Strategic Business Segmentation 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  Total Separation of 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

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

 Registrar business  E-solution Business  African Market

• Each business area 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

2

OPERATING ENVIRONMENT

OPERATING ENVIRONMENT

14%

Interest Rate

*As at Sept 2018

22.5%

Cash Reserve Ratio

*As at Sept 2018

11.28%

Inflation Rate

*As at Sept 2018

13.31%

Food Inflation Rate

*As at Sept 2018

2.9%

GDP Growth Rate

*As at June 2018

N360/$

Exchange Rate

*BDC; as at Sept 2018

B2

Credit Rating

*Moody’s; as at Nov 2017

$45.9bn

Foreign Exchange Reserves

*As at Sept 2018

145th

Ease of Doing Business

*As at Dec 2017

$78.89

(Dollars per barrel)

Crude Oil

(Brent Crude) *As at Sep 2018

Source: Trading Economics Page|8

3

FINANCIAL OVERVIEW

Q3 2018 RESULTS SNAPSHOT

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Financial Metric (N' Billion) Q3 2018 Q3 2017 Change Revenue 2.58 2.27 +14% Operating Expenses (0.97) (0.75) +28% Profit Before Taxation 1.62 1.45 +11% Profit After Taxation 1.35 1.31 +3% EPS (Kobo) 67 65 +3% Financial Metric (N' Billion) Q3 2018 FY 2017 Change Total Assets 18.81 21.93

• 14%

Total Liabilities 11.38 14.99

• 24%

Total Equity 7.43 6.94 +7%

0.56 0.57 0.75 0.97 Q3 2015 Q3 2016 Q3 2017 Q3 2018

Operating Expenses (N'billion)

1.75 1.53 2.27 2.58 Q3 2015 Q3 2016 Q3 2017 Q3 2018

Gross Earnings (N'billion)

…INCREASING EARNINGS

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34% 41% 29% 36% 66% 59% 71% 64%

Q3 2015 Q3 2016 Q3 2017 Q3 2018

Breakdown of Earnings(%)

Fee Income Investment Income

 Over the last 4 years (Q3), Africa Prudential grew gross earnings by 14% CAGR, leveraging

• n

innovation, technology and efficient management

• f

investment activities.  Fee Income grew by an impressive 43% year on year in Q3 2018, driven by increase in number of customers serviced.  Also, Net Investment Income contributed 64% of Gross Earnings, driven largely by efficient management of investment activities.  Operational Expenses increased by 28% year on year. This was largely due to technological advancement, business expansion, product development and recruitment.

1.08 0.82 1.31 1.35 Q3 2015 Q3 2016 Q3 2017 Q3 2018

Profit After Tax (N’billion)

62% 54% 58% 52%

Q3 2015 Q3 2016 Q3 2017 Q3 2018

Profit Margin(N’billion)

1.19 0.93 1.45 1.62 Q3 2015 Q3 2016 Q3 2017 Q3 2018

Profit Before Tax (N'billion)

STRONG PROFITABILITY

Page|12  Profit Before Tax grew 11% CAGR over the last 4 years representing a strong momentum in terms of profitability.  The Company recorded a 3% year on year growth in Profit After Tax to N1.35billion, representing the highest profit in the 4-year period.  The Company’s Profit Margin stood at 52% and delivered an EPS of 67 kobo.

FY 2015 FY 2016 FY 2017 Q3 2018

Total Liabilities (N’billion)

13.12 12.27 14.99 11.38 FY 2015 FY 2016 FY 2017 Q3 2018

Total Assets (N’billion)

16.8 21.93 18.81

BALANCE SHEET SNAPSHOT

Page|13  The Company’s Total Assets declined by 14% YTD, largely due to reduction in cash  Total Shareholders Funds grew 7% YTD  The Company’s Total Liability declined by 24% YTD. FY 2015 FY 2016 FY 2017 Q3 2018

Shareholder’s Fund (N’billion)

4.57 4.55 6.94 7.43 17.7

4

2018 OUTLOOK & KEY TAKEAWAY

2018 OUTLOOK

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Q3 2018 Actual 2018 Guidance % of Guidance 1 Gross Earnings N2.58Bn N3.8Bn 68% 2 Professional Fee Income N0.94Bn N1.3Bn 72% 3 Net Investment Income N1.64Bn N2.3Bn 71% 4 Operating Expense N0.97Bn N1.4Bn 69% 5 Profit Margin 52% 55% 95% 6 Return On Equity 25% 32% 78% 7 Return On Assets 9% 9% 100%

5

APPENDIX

ABOUT AFRIPRUD - ACTIVITIES & AWARDS

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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 Phase One B: (2006 - 2013) Phase One A: (1970 - 2005) Phase Two: (2014 - 2017)

ABOUT AFRIPRUD - ASPIRATIONS

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Over the next 7 years, Africa Prudential is poised to be No.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 E-Solutions Business Market Leader with Technology And Innovation Total Separation of Registrar Business Entry Into the African Market Sustain Strong Capital Base To Penetrate Other African Markets

#1 In

Nigeria

AFRIPRUD & TECHNOLOGY

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Information Technology

01 Easy Access 02 User Friendly 03

Information Technology

• IT is the bedrock of our 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. User Friendly

• Our technology has been designed to be highly user friendly with an

interface that enables our clients to have the best experience. 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
• ur various products.

INCOME STATEMENT

Page|20 In thousands of Nigerian Naira 30-Sep-18 30-Sep-17 Registrars fee income 941,348 659,860 Net investment income 1,640,901 1,611,161 Gross earnings 2,582,249 2,271,021 Other income 79,690 35,433 Impairment loss on financial assets (74,042) (100,000) Personnel expenses (456,556) (292,984) Other operating expenses (456,556) (424,667) Depreciation and amortization (55,390) (36,079) Finance charges

• Profit before tax

1,619,395 1,452,724 Income tax expense (273,737) (144,100) Profit after tax 1,345,658 1,308,624 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 (52,434) 112,054 Fair value gain/(loss) on unquoted equity

• Total comprehensive income

1,293,224 1,420,678 Basic earnings per share (kobo) 67 65

STATEMENT OF FINANCIAL POSITION

Page|21 In thousands of Nigerian Naira 30-Sep-18 31-Dec-17 ASSETS Cash and cash equivalents 5,324,325 9,192,490 Financial assets (Available For Sale) 4,388,005 4,440,443 Financial assets (held to maturity) 8,303,368 7,554,522 Trade and other receivables 210,963 257,107 Inventory 16,578 16,578 Other assets 243,871 72,070 Property, plant and equipment 223,692 223,683 Intangible asset 74,498 77,921 Goodwill 24,651 98,693 TOTAL ASSETS 18,809,951 21,933,507 LIABILITIES Customers' deposits 10,630,912 10,792,264 Creditors and accruals 478,379 330,913 Taxation 233,841 224,407 Deferred tax assets 34,110 34,110 Current liabilities 11,377,242 11,381,694 Loan

• 3,612,328

TOTAL LIABILITIES 11,377,242 14,994,022 SHAREHOLDER’S EQUITY Share capital 1,000,000 1,000,000 Share premium 624,446 624,446 Retained earnings 5,432,310 4,886,652 Other reserves 375,953 428,387 TOTAL EQUITY 7,432,709 6,939,485 TOTAL LIABILITIES AND EQUITY 18,809,951 21,933,507

QUESTIONS?

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Contact Investor Relations Email: investorrelation@africaprudential.com Tel: +234 813 984 0850-4