Investor Presentation June 2020 1
Disclaimer This presentation is not an offer or invitation to subscribe to or purchase any securities. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial condition of KIPCO. Nothing in this presentation shall form the basis of any contract or commitment whatsoever. This presentation is furnished to you solely for your information. You may not reproduce it or redistribute to any other person. This presentation contains forward-looking statements. These statements may be identified by such words as "may", "plans", "expects", "believes" and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions. Various factors could cause future results, performance or events to differ materially from those described in these statements. No obligation is assumed to update any forward-looking statements. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the forgoing limitations. Figures in presentation have been rounded off. 2
KIPCO Group 3
2019 results 2018 2019 Growth In KD mn 774 766 -1% REVENUE 28 30 6% NET PROFIT 4
Successful completion of rights issue 17% US$314mn oversubscription (KD95mn) in equity @210 fils per share 5
Landmark bond transaction 7 years tenure Largest ever demand Oversubscribed by Interest cost savings Lowest ever coupon Execution speed (annualized) Diversified investor demand spread across Asia, ME, Europe and US offshore 6 * Represents debt maturity as on September 30, 2019 after including the issue # Represents peak demand numbers being largest ever for KIPCO
Key Group Companies 7
Performance highlights Net Profit growth of 3% ▪ Issued US$ 500 million in Perpetual Tier 1 Capital Securities with a yield of 5.75% ▪ Demand Initiators Strong capital adequacy: 17%; stable asset quality: 2.1% NPA ▪ Net profit growth of 12%; gross premium written growth of 8% ▪ Afya continues for the 3 rd consecutive year ▪ Demand Initiators Amongst top 5 insurance companies in the Middle East region 1 ▪ Revenue growth of 8% ▪ KAMCO completed merger with Global Investment House ▪ ` Demand Initiators KAMCO reported a 47% growth in revenue ▪ Revenue growth of 6% ▪ Continued to grow its facilities and student base ▪ Demand Initiators 8 1 based on gross premiums written
Performance highlights cont ’ d Revenue growth of 10% ▪ Revaluation losses impacted financial performance ▪ Demand Initiators Revenue growth of 13% 1 ▪ Acquired 60% stake in Jassim Transport Company in June 2019 ▪ Demand Initiators Moving into petrochemical upstreaming projects with good potential ▪ Revenue growth of 11% 1 ▪ Net profit growth of 21% 1 ▪ ` Demand Initiators Healthy cash balance of SAR584mn with zero leverage ▪ 9 1 For the first nine months of financial year 2019-2020. QPIC & SADAFCO ’ s financial year starts on April 1st and ends in March 31 st
OSN Update Larger reach Ability to deliver product to all 25 countries in the region ▪ through OTT No one does Exclusive DTH & OTT content rights in the 1st pay window ▪ content like Original Arabic Production in progress ▪ OSN Rebranded OTT now with Disney+ starting April 2020; better user interface OTT platform ▪ progress Focus on both direct and indirect distribution ▪ Successful Content cost rationalized* ▪ business 28% reduction in G&A and staff cost in 2019 vs. last year ▪ streamlining Strengthened New CTO & SVP , Marketing joined ▪ Management BoD strengthened with expertise on streaming (OTT) and original content ▪ Team 10 *US$120mn savings against contractual value in 2019
Looking ahead 2020 11
Outlook Global impact of Corona virus unknown as yet Significant and Evolving ▪ Oil price impact in 2020 2020 average forecast: US$39 1 ; 2019 average: US$64 2 ▪ Spot Brent price (3 June 2020): US$39 2 ▪ 12 1 Average 2020 forecast as per Bloomberg 2 Per barrel as per Bloomberg
COVID-19 impact management 1 During crisis: • Business to serve customers & minimize financial impact. 2 After crisis: • Ensure operational readiness to capture market opportunities. 13
Initial observations on 2020 profit Insurance • Stable picture in core business - Lower claims offset by slower revenue growth • Investment book performance hard to predict due to market volatility Media • Outperforming budget in first 5 months • Increased customer usage and lower churn • New sales impacted by retail outlet closure from lock down 14
Initial observations on 2020 profit cont ’ d Banking • Uncertainty in loan book quality will remain • Investment book performance hard to predict due to market volatility • Regulatory directives uncertain Real estate and hospitality • Fundamental matters effecting sector such as: • Population size • Travel and mobility 15
Initial observations on 2020 profit cont ’ d Petrochemicals • Oil price level for rest of the year will impact profitability All businesses • Adapting to working from home - Group staff has risen to the occasion • Execution constraints on new initiatives being faced with vendors 16
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Beginning digital journeys 18
Burgan Bank: New online banking app Multiple Easy to Use integrations Quick Pay Latest security features More to follow … . Strong 5 4 App 3 rating* 2 1 665 total 19 *Source: Google Play Store (03 June 2020)
OSN: Streaming App Rebranded; Now with Disney+ 4.0 , 15k Ratings 4.4 , 2.5k Ratings 4.4 , 10.3k Ratings 8.7 6.3 9.3 7.0 8.3 8.4 7.8 9.5 Ratings 20 Source: Apple App Store; IMDb Ratings (10 June 2020)
GIG: Investing in digital products & distribution channel Enhanced website (UI / UX); GIG Web Portal Invested in YallaCompare to strengthen digital distribution channels Distribution Claims Assessment Digital TPA Digital Group CRM & Analytics Motor Telematics Operations Products & Employee Services benefits Portal 21
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