corporate briefing session holdings -corporate briefing session.pdf · by pakistan stock exchange...

Creating a better tomorrowIGI Holdings Limited

Corporate Briefing Session

IGI Holdings LimitedDecember 19, 2019


Content

1. Company Overview

2. Investment Portfolio

3. Financial Highlights

4. Questions & Answers


About IGI Holdings Limited

• Public Listed Company – operating as an investment holdingcompany

• Has an investment base of Rs. 55 billion (Carrying Value Rs. 37billion)

• Has investments in financial services, packaging, food and beverage,pharma and IT companies

• Has Credit Rating AA (Long Term) and A1+ (Short term) byPACRA.

FMCG63%

PACKAGING21%

FINANCIAL SERVICES

10%

REAL ESTATE2%

PHARMA3%

IT1%


Our Journey…

Awarded Top 25 companies for year 2018 by Pakistan

Stock Exchange

2019

Transformation into Holding Company Structure through

merger of IGI Investment Bank

with IGI Insurance and Demerger of

Insurance Business and

Investment Segment into IGI

General Insurance and IGI

Investments

Renamed as IGI Holdings Limited

2017/18

Acquisition of 81.69% stake of Pakistan

operations of American

Life Insurance Company (Met Life

Alico)

[now IGI Life Insurance Limited]

2014

Acquisition of Pakistan

operations of Royal and

Sun Alliance (RSA) PLC,

UK

2004

Joint Venture with

American Express

Bank and International

Finance Corporation (IFC) to form

IGI Investment

Bank

1990

Listing on Stock

Exchange

1987

Incorporation of insurance company in collaboration with Alliance PLC, UK under name

“Intl. General Insurance Company of Pakistan”

1953


IGI Holdings Group

IGI Holdings Limited

IGI General Insurance

Limited100%

IGI Investments (Pvt.) Limited

100%

IGI Life Insurance

Limited82.69%

IGI FinexSecurities Limited

100%


Content

1. Company Overview

2. Investment Portfolio Performance




IGI General Insurance Limited


Insurance Industry of Pakistan

Total Premium Written in Pakistan – Life and Non Life

excluding State Life and NICL

34 35 38 43 44 49 55 61 65 76 8612 13

1723

3141

48

7482

110112

0

50

100

150

200

250

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PK

R B

illio

n

Nonlife

USD: 1.3bnPKR 197bn Insurance Density

(Premium/Capita)Pakistan

(USD)Region*

(USD)

Non Life 2.20 8.23

Life 2.70 22.72

Overall 4.90 30.95

Insurance Penetration (Premium/GDP) Pakistan

(%)Region*

(%)

Non Life 0.24 0.64

Life 0.65 1.60

Overall 0.89 2.24


IGI General Insurance Limited

• IGI General provides non-life insurance and

takaful services in the spheres of Fire, Marine,

Motor, Health and Miscellaneous classes.

• IGI General holds ~ 6% market share in non-life

insurance industry in Pakistan and is part of Top

4 non-life insurance companies in Pakistan in

terms of Gross Premium.(Source: IAP Statistics June 2019)

• PACRA and VIS Credit Rating Agency have

awarded IFS rating of AA to the Company.


Presence in Business Hubs in Pakistan


Product Portfolio

Property & Casualty

Motor

Health

Engineering & Bond

Travel

Takaful

Liability

Fire27%

Marine12%

Motor32%

Health8%

Miscellaneous

21%

Business – Mix 2018


Major Customers


Our Reinsurance Partners - 2019

Hannover Re

Lloyd’s Syndicates

Labuan Re

Atradius Re

SCOR Global P&C

PeaK Re

TIM

Pak Re

Korean Re

Arab Insurance Group

Echo Re

Kuwait Re

Saudi Re

Lead

Follower


Financial Highlights – Jan - Sept 2019 vs 2018

Gross Written Premiums

Rs. 4,337 m vs 3,645 m

Net Premium Revenue

Rs. 1,809 m vs Rs. 1,673 m

Underwriting profit (inc. Takaful)

Rs. 224 m vs 207 m

Investment Income (inc. Takaful)

Rs. 255 m vs Rs. 108 m

Profit before Tax

Rs. 499 m vs Rs. 323 m

Profit after Tax

Rs. 367 m vs Rs. 231 m


IGI Life Insurance Limited


About

• 1994 - Formed as a Public Limited Company (Metlife Alico) with start-up of Operations in 1995.

• 2014 - Acquired by a Packages Group Company, IGI Insurance Limited (Now IGI HoldingsLimited)

• IGI Holdings currently holds 82% stake in the Company.

• 2018 - Collaborated with Vitality Group International (having presence in 52 countries).

• The Company has:

• Presence through 22 sales offices/branches across Pakistan.

• Has 200 direct & 400 indirect staff members.

• Credit Rating A+ (with stable outlook) by PACRA.


Product Suite of

Individual Life Products

Conventional Savings Plans

Unit Linked Insurance

Plans

Medical Coverage Products

Individual Accidental and Health

Plans

Corporate Employee

Benefit Products

Group Life Insurance

Plans

Group Medical

Coverage Plans

Attempting to Disrupt through “Innovation”

Brought in Vitality to Pakistan


Vitality – A Success StoryOperate in 19 countries & 8.9 million Vitality members globally*

Launched in 1997

200 thousand

new members

each month

Every single minute this

platform tracks roughly a

1,000 activities and picks

up about 50 biometric

readings

The model is built on a

foundation of 40 million

life years of health, life and

insurance data linked to

wellness behavior

https://www.linkedin.com/pulse/dia-interview-andre-nepgen-discovery-all-ecosystems-roger-peverellihttps://www.forbes.com/sites/tobyshapshak/2018/11/14/south-africas-biggest-medical-aid-discovery-launches-first-behavioural-bank/#6dedd2a57900https://www.vitality.co.uk/careers/our-history/

https://www.linkedin.com/pulse/dia-interview-andre-nepgen-discovery-all-ecosystems-roger-peverelli

https://www.forbes.com/sites/tobyshapshak/2018/11/14/south-africas-biggest-medical-aid-discovery-launches-first-behavioural-bank/#6dedd2a57900

https://www.vitality.co.uk/careers/our-history/


Vitality – Shared Value Insurance


Vitality – Infrastructure

IGI Life Insurance has created a platform to market its Unique Insurance

Products.

IGI FSI - Set-up of In-house Training Institute for human capital capable of selling

Vitality Products.

Investment in IT Infrastructure to support its operations

Met the financial requirements of the project through right issue in Aug 2019.


Our Business Partners

Banca Partners

• Standard Chartered Bank

• Bank Alfalah

• Soneri Bank

• Silk Bank

• Dubai Islamic Bank

Reinsurance Partners

• Hannover Re

• Munich Re

Corporate Relations

Over 500 Relations



• The Gross premium written by the

Company had slightly decrease by 3% as

compared to same period LY.

• Investment income increased due to

increase in discount rate from 5.75% to

13.25%

• Incurred Loss after tax of Rs. 176 million

mainly due to

• increase in marketing expense due

to launch of new product “Vitality”,

• IT Costs for improving operational

Efficiency, and

• Expansion of its distribution

outreach.

Description

Nine Months

Ended Sept 30,

2019

Nine Months

Ended Sept 30,

2018

Rupees in 000's

Gross Premium 3,591,132 3,706,019

Net Premium 3,478,861 3,604,818

Net claims (including surrenders) 3,586,364 3,764,234

Investment Income (including other

income)1,152,344 790,685

Acquisition cost 550,624 465,233

Admin Expenses 828,860 562,201

(Loss) / profit before tax (248,113) 52,370

(Loss) / profit after tax (176,159) 37,174

(LPS) / EPS (Rs.) (1.40) 0.31


IGI Finex Securities Limited


Introduction to IGI Securities

• Established in 1994; Serving for 25 years.

• TREC holder of Pakistan Stock Exchange; Corporate member

of Pakistan Mercantile Exchange.

• Branch network in Karachi, Lahore, Islamabad, Faisalabad,

Rahim Yar Khan, Multan & Abbotabad.

• Online trading platform (internet and mobile based) that caters

to clients locally as well as abroad.


Organizational StructureIGI Securities

Fro

nt

Off

ice

Mid

dle

& B

ack

O

ffic

e

Equity Brokerage

Research

Risk Management

Operations & Settlement

Finance & Accounts

Information Technology

Human Resource Management

Su

pp

ort

F

un

ctio

n

iTrade (Internet & Mobile Trading)

Commodity Brokerage

Internal Audit

Compliance


Products and Services

Equity Brokerage

10,000+ clients in more than 60 cities across Pakistan as well as abroad; Comprising institutions,

corporate, high net worth and retail investors.

Market share of +/- 3.5%.

Commodity Brokerage

Commodity brokerage service provided by IGI Securities offers trading opportunities to customers at

Pakistan Mercantile Exchange (PMEX) – online commodity exchange of Pakistan.

Research

The research coverage extends over 45 companies across major sectors. Our research papers include:1. Day Break: IGI’s daily publication keeping an investigative eye on news on the corporate, economic and

political front.

2. Equity Research: In depth individual, thematic, and sectoral reports spanning across major sectors.

3. Economy and Strategy: Annual Strategy, Monthly and Quarterly Economic reviews, Monetary Policy

preview and reviews, Federal Budget preview and reviews.


Retail Footprint

Offering online trading to clientele through iTrade (Internet & Mobile Trading)

Client base spread over 69 cities across Pakistan as well as abroad

Over 10,000 retail accounts

City Wise Client Distribution

Karachi Lahore Faisalabad

Islamabad Rawalpindi Multan

Peshwae Sialkot Others


Governance & Compliance

Governance

Board & Audit Committee headed by non-executive director.

Statutory Auditors – A. F. Ferguson & Co. – a member firm of PwC;

Internal Audit function – co-sourced to Ernst & Young.

Compliance

Strong independent compliance function.

Closely working with SECP on implementation of AML/CFT Framework across Stock Brokerage

industry. Represented Stock Brokerage industry before Asia Pacific Group (APG) as part of Mutual

Evaluation of Pakistan and UKFIU.



YTD 2019 YTD 2018 YTD 2019 vs

(Jan – Sep) (Jan – Sep) YTD 2018

Average Daily Volume (No. of shares) - PKR mn 198 262 -25%

Average Daily Value (Rs.) - PKR bn 8 11 -32%

-------- Rupees --------

Operating revenue 51,701,667 64,341,726 -20%

Other income 23,008,438 15,675,383 47%

74,710,105 80,017,109 -7%

Administrative and operating expenses (85,269,689) (99,350,834) -14%

Financial Charges (386,926) (426,633) -9%

(10,946,510) (19,760,358) -45%

Reversal of provision / (provision) for doubtful debts 8,376 - 100%

(Loss) / Profit before taxation (10,938,134) (19,760,358) -45%


IGI Investments (Pvt.) Limited


About IGI Investments

• Operating as an investment holding company

• Has an investment base of Rs. 50 billion(Carrying Value Rs. 34 billion)

• Has investments in packaging, FMCG, pharma,real estate and IT sectors

FMCG71%

PACKAGING23%

REAL ESTATE2%

PHARMA3%

IT1%


INVESTMENT PORTFOLIO

IGI

Investments

Packages

Limited

Packages

Real

Estate

Tri-Pack

Films Ltd

Nestle

Pakistan

Ltd

Sanofi

Aventis

Systems

LimitedSiemens

Engg.

29.9% 24.8% 9.7% 9.75% 3.8% 0.85%

Other

Investments

19.1%

Coca Cola

Beverages

Ltd

0.5%


Packages Limited

Flexible Packging

Folding Cartons

Consumer Products

23%

25%

52%

Total Sales

PKR

17B


Packages Real Estate

Area

1.3M sqft>200

Shops

Inaugurated

2017

* Nine months ended Sept 30, 2019

RENTAL (19 Vs 18)

Rs.2.7B Vs Rs. 2.4B

12.5%

EBIT (19 Vs 18)

Rs.936M Vs Rs.606M

54%

24.8%Associate


Tri-Pack Films

9.75%Associate

OUR PRODUCTS

Transparent Lamination Grade

Metallizable Heat Sealable CPP Film

Metallized Heat Sealable CPP Film

White Opaque Heat Sealable CPP Film

Transparent Barrier Film

Plain Film

Composite

Cigarette Grade

Pearlized

MetalizedNine months ended Sept 30

EBIT (19 Vs 18)Rs.514M Vs Rs. 575M

11%

NET SALES (19 Vs 18)

Rs.10.6B Vs Rs. 9.8B

8%



Dividend Income

Rs. 1,155 m vs Rs. 1,706 m

Profit after Tax

Rs. 788 m vs Rs. 1,239 m

Investments

Rs. 33,830 m vs Rs. 49,564

m

Equity

Rs. 31,922 m vs Rs. 47,462

m

FMCG58%

PACKAGING36%

PHARMA5%

IT1%

Dividend income split


Strategic and operational direction

Company consolidated its stake in Nestle Pakistan through acquisition 0.13% In Nestle

Pakistan Limited

Company signed a JV Agreement with SC Johnson & Son as its step into home

cleaning and pest control consumer industry


Content

1. Company Overview





IGI HoldingsProfit and Loss

Finance cost includes:

- Markup on 1.5bn Term loan Rs. 98.30m

- Markup on short term loan Rs. 43.06m

9 months Avg. Borrowing Rate:

2019: 12.37% vs. 2018: 7.19%

Description Sep 30, 2019 Sep 30, 2018

Rupees in ‘000

Dividend Income

- IGI Investments 594,105 1,960,546

- IGI General 403,348 163,062

- IGI Life - 56,893

- IGI Finex - -

- Techlogix 497 -

997,950 2,180,501

Finance costs (141,378) (72,594)

General and administrative expenses (63,601) (62,677)

Recoveries against loans and lease portfolio 7,700 12,467

Other income 1,826 11,484

.

Net profit before tax 802,497 2,069,181

Taxation - current (2,193) (18,778)

- prior - (65,739)

- deferred 29,685 -

Net profit after tax 829,989 1,984,664

EPS (Rs.) 5.82 13.95


IGI HoldingsBalance SheetDescription As at Sep 30, 2019 As at Dec 31, 2018

Rupees in ‘000

Assets

Investment in subsidiaries 15,643,613 14,811,590

Tax recoverable 54,833 54,694

Withholding tax recoverable 6,530 6,530

Deferred tax asset 85,170 55,485

Cash and Bank 22,166 6,990

15,812,312 14,935,289

Liabilities

Long term loan 1,050,000 1,200,000

Short term loan 972,943 409,623

Accrued markup on long term & short term

finances 66,525 6,577

Unclaimed dividend 29,082 32,748

2,118,550 1,648,948

Net Assets 13,693,762 13,286,341

Net Assets – IGI Investment Bank

- Assets 246,008 251,408

- Liabilities 235,102 231,944

10,906 19,464

Equity 13,704,668 13,305,805

During the period, IGI Holdings has subscribed to 83.2 million

right shares of IGI Life amounting to Rs 832 million.

3

6

8

4

6

45 57

68

199

48

2014 2015 2016 2017 2018

Dividend per share (Rs.) Payout ratio (%)

Dividend per Share


Consolidated financial performance of the

Group9 Months FY 2019


IGI Holdings consolidated results9 Months FY 2019 vs 2018

Revenue

Rs. 7,291 m vs Rs. 7,106 m

Profit before tax

Rs. 883 m vs Rs. 1,603 m

Profit after tax attributable to Parent

Rs. 726 m vs Rs. 1,078 m

Earnings per share

Rs. 4.88 vs Rs. 7.65


IGI HoldingsConsolidated Profit and Loss

883

300

311 84

217

176

9

7

1,603

PBT for 9M 2018 IGI General IGI Life IGI Finex IGI Investments

(excluding dividend

from associates)

IGI Holdings

(excluding divdend

from subsidiaries)

Share of profit from

associates

Others PBT for 9M 2019

Investment in Vitality & related

infrastructure

Increase in Finance Cost due to increase in KIBOR

~ 12.4% (9M 2019) vs ~7.2% (9M 2018)

Decline in Dividend

Income by Rs. 212m

Impairment in investment by Rs. 500m (IGI share: Rs. 150m) &

Decrease in Dividend income by Rs 275m (IGI Share: Rs. 80m)


Strategic and operational direction

IGI Holdings subscribed to right issue of IGI Life amounting to Rs 832 m to

finance Vitality Project in Life insurance.

As a result, IGI Holdings shareholding increased from 81.97% to 82.69%.


Content

1. Company Overview





Important DisclaimerTHIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL ANY

SECURITIES OR ANY INVESTMENT

This presentation has been prepared by IGI Holdings Limited (“IGI Holdings”) solely for information purposes. No representation or warranty express or implied is made thereto, and no reliance

should be placed on, the fairness, accuracy, sufficiency, completeness or correctness of the information or any opinion contained herein, or any opinion rendered thereto. The information

contained in this presentation should be considered in the context of the circumstances prevailing at the time and will not be updated to reflect any developments that may occur after the date of

the presentation. Neither IGI Holdings nor any of its respective subsidiaries, affiliates, officials, advisors, associates, employees or any person working for, under or on behalf, shall have any

responsibility and/or liability of any nature whatsoever (in contract or otherwise) for any loss whatsoever arising from any use of this presentation or its contents or otherwise arising in connection

with this presentation.

This presentation does not constitute or form part of a prospectus, offering circular or offering memorandum or an offer, solicitation, invitation or recommendation to purchase or subscribe for any

securities and no part of it shall form the basis of, or be relied upon in connection with, or act as any inducement to enter into any arrangement, agreement, contract, commitment or investment

decision in relation to any securities. This presentation shall not at all be intended to provide any disclosure upon which an investment decision could be made. No money, securities or other

consideration is being solicited, and, if sent in response to this presentation or the information contained herein, will not be accepted.

The presentation may contain statements that reflect IGI Holdings own beliefs and expectations about the future. These forward-looking statements are based on a number of assumptions about

the future, which are beyond IGI Holdings control. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or

standard scenario. Such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant

forward-looking statements. IGI Holdings does not undertake any obligation to update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this

presentation and it does not make any representation, warranty (whether express or implied) or prediction that the results anticipated by such forward-looking statements will be achieved. In

addition, past performance should not be taken as an indication or guarantee of future results.

Certain data in this presentation was obtained from various external data sources that IGI Holdings believes to its knowledge, information and belief to be reliable, but IGI Holdings has not verified

such data with independent sources and there can be no assurance, representation or warranty as to the accuracy, sufficiency, correctness or completeness of the included data. Accordingly, IGI

Holdings makes no assurance, representation or warranty as to the accuracy, sufficiency, correctness or completeness of that data, and such data involves risks and uncertainties and is subject

to change based on various factors.

You agree to keep the contents of this presentation strictly confidential. All or any part of this presentation may not be taken away, reproduced, copied, redistributed,

retransmitted or disclosed in any manner or form and for any purpose whatsoever.

By attending this presentation, you are agreeing to be bound by the foregoing limitations.


Thank you

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