AA Full Membership Value Proposiion

AA Full Membership Value PropositionBecome Part of The Future AA

Inspiring Mobility

Photo Courtesy | ÖAMTC

Become Part of The Future AA

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Who is AA?

• Founded in 1919, AA has been in existence for over 100 years• The premier motoring association offering motor related services• A member of Federation International de l’Automobile (FIA), the

largest motoring body in the world• Member of Alliance International de Tourism (AIT) – an international

alliance for tourism clubs • Champion in Road Safety

Vision

To be the market leader in mobility solutions in Kenya

Mission

Providing world-class mobility solutions

Values

• Integrity | Trust | Customer focus | Professionalism | Innovation


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Products and Services

• Road Assistance Services: These include road patrols, breakdown services, rescue services and recovery services, among others

• Driving School: Learner driver training and refresher programs • Motor Vehicle Inspection and Valuation Services • AA Cover• Technical Training: Defensive Driving, Vehicle Mechanics and Fleet

Management• Guidance on vehicle running costs – AA Mileage Rates, used by the

Government Ministries, Parastatals and Corporates• Fleet Management: Vehicle Tracking and Fuel Management

Solutions• Inspection, Certification and Appointment of Garages to serve

member motoring needs • Insurance Brokerage Services• Facilitation of International Travel through issuance of international

road travel documents including, International Driving Permits, Carnet de Passage (Car Passport) and conversion foreign driving licenses into Kenyan local licenses

• Driver Assessments and Recruitment

Milestones

For the last 102 years, AA Kenya has been the market leader in mobility solutions. AA has evolved from navigating roads, setting up petrol depots, running Safari Rally, importing vehicles on behalf of members, to an Association with a wide array of mobility products and services. The Association has thrived and remained resilient even during turbulent times. AA has also taken the lead in:

• Setting standards on vehicle running costs - AA Mileage Rates • Pioneering motor vehicle inspection and valuation in Kenya• Appointing, training and certifying garages • Offering Professional Defensive driving programs.• Issuing International Travel Documents (Carnet de Passage and

International Driving Permits)


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International Affiliations

Internationally, AA Kenya is a member of Federation Internationale de l’Automobile (FIA), the world motoring body which represents over 100 million motorists and their families. FIA brings together 246 international motoring and sports organizations from 145 countries in 5 continents.

AA is also a member of the world Touring Body – Alliance Internationale de Tourisime (AIT). Internationally AA represent Kenya in Road Safety Discussions.

The President of the Association and Chief Executive Officer hold the positions of Vice President and Treasurer respectively of the African AA Clubs - African Council of Touring and Automobile Clubs (ACTA).

Benchmarking Automobile Associations in the World

Some of the Automobile Associations worldwide are very successful, with diverse and innovative products and services. Some of the services offered by other AA’s include:

• 5-star hotels• Operation of fuel stations• Vehicle service centres• Advanced driving school simulators• Advanced road rescue including helicopter services• Home emergency support, among other services.


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Hotels run by AA Argentina PHOTO | COURTESY


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AA Austria rescue team PHOTO | COURTESY

One of the Service Stations run by AA Argentina PHOTO | COURTESY

AA Argentina Driving School Simulators PHOTO | COURTESY


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The Future AA Kenya – Business Strategy

It is time for AA to align with the world’s best. Leveraging on international experience from other AA’s, the Association has developed a strategy that will be implemented over the next five years. This strategy will transform AA into a world-class, innovative and more profitable organization. AA has identified 3 growth areas in its strategy;

1. Diversification

• Service Centres

AA will establish state-of-the-art Service Centres in major towns including Nairobi, Mombasa, Kisumu, Eldoret and Nakuru. These centres will be fully equipped with modern equipment, leveraging on our global experience. AA will therefore guarantee the quality of service and genuineness of parts. Additionally, with the support of FIA, AA will promote green technology, e.g., embracing electric vehicles, autonomous vehicles, among other technologies. The Association will henceforth be the go-to experts and thought leaders in the motoring industry.

• The Africa School of Mobility

This Institute will be a learning centre that will serve Kenya and Africa in motoring matters. The Centre will employ modern technology and best-in-class equipment. This includes Driving School Simulators, Plant Operator equipment and other modern motor vehicle and plant equipment. The Association will partner with FIA University to deliver these programs.

2. Mobility Products Innovation

AA plans to roll out innovative products and services in:

• Motor vehicle inspection and valuation• Rescue and accident scene management• Vehicle running cost management, AA e-mileage rates


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3. Brand Positioning and Expansion

• Expansion of the AA footprint by an additional 42 new branches spread across the 47 counties

• Regional expansion to Rwanda and Ethiopia • Re-branding aimed at enhancing customer experience

The Need for Capital

The strategic projects above are capital intensive and hence the need to raise capital.

Corporate Restructuring

A need to restructure the Association has been identified, given that currently it is registered as a Society which is restrictive in terms of trading. The restructuring calls for demutualization of the Association. In this case, demutualization is the process of changing AA from an Association registered under the Societies’ Act to a Public Limited Company (PLC) limited by shares under the Company’s Act.

Progress made so far

The Association has made the following progress:

• Held an Annual General Meeting (AGM) in January 2021, where members approved the demutualization of the Association, followed by capital raising. Part of the demutualization involved review of the membership framework by introducing a single membership category

• Held an Extraordinary General Meeting (EGM) in October 2021, where all relevant resolutions to support this project were passed.

• Consulted widely with the right industry experts including the Capital Markets Authority (CMA), Nairobi Securities Exchange (NSE), among others

• Joined the NSE Ibuka Acceleration Program • Appointed capital raising experts including Standard Investment

Bank and MMC ASAFO• Conducted due diligence • Addressed legal and structural requirements • Adoption of the appropriate capital raising approach


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Due Diligence

The experts have so far conducted financial, operational, commercial and legal due diligence and confirmed that the Association:

a. Is of sound financial health and is commercially viable; b. Is legally compliant as required, including in the area of taxation,

statutory and governance;c. Has strong operational controls;d. Has an organization structure that is well adapted to address the

core functions of the association;e. Has robust human resource policies and procedures developed in

line with global HR policies and procedures; andf. Has a good governance structure


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Financial Performance

Below is a summary of the Association’s performance over the last 3 years, and projected performance in the next 6 years.

Income Statement Kes 'M'

2018 2019 2020 2021 2022 2023 2024 2025 2026

Total

Revenue

621

722

472

772

1,315

1,691

2,044

2,359

2,679

Total Costs

607

643

461

562

1,102

1,374

1,538

1,639

1,773

Net Profit

14

79

11

210

213

317

506

720

906

-

200

400

600

800

1,000

2018 2019 2020 2021 2022 2023 2024 2025 2026

Net Profit Growth (Kes 'M')

621 722 472

772

1,315

1,691

2,044

2,359

2,679

-

500

1,000

1,500

2,000

2,500

3,000

2018 2019 2020 2021 2022 2023 2024 2025 2026

Revenue Growth (Kes 'M')

Covid


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Full Membership Proposition

a. Who is a Full Member?

Full Members will be the future shareholders of AA Kenya upon demutualization. Currently, this is the only category of membership and is open to all. One can now register by paying a one-off fee of Kenya Shillings Fifty Thousand (Kes. 50,000) and a discounted fee of Kenya Shillings Forty Thousand (Kes. 40,000) for members who were in the AA register by 19th October 2021. Full Members will be issued certificates of membership upon payment.

b. Benefits

• Allotment of shares upon demutualization of the Association - After the cut-off date, AA will start the process of demutualization and all Full Members will be allotted shares in the new company.

• Voting rights - Full Members will have voting rights in the Association.

• Discounts on AA products and services - Full Members will enjoy various discounts for all products offered by AA. In addition, they will enjoy benefits from AA partners including fuel discounts from TotalEnergies, vehicle service and parts discounts from Kingsway, Toyotsu, DT Dobie, among others.

• Future dividends - It is expected that AA will be more profitable in future and shareholders will enjoy good returns on investment.


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How to become a Full Member

1. Enrollment via USSD code *650#

• Dial *650# and follow the prompts. Enter your ID or membership number

• If you are in the Association’s register, the system will prompt you to pay Kes 40,000. If not, you will be prompted to enter KYC details and pay Kes 50,000

• After the payment has been confirmed, you will receive a text message confirming successful registration and a link where you can download your Full Membership Certificate

2. Enrollment via Web

• Visit https://fullmembership.aakenya.co.ke/ and enter your ID or membership number

• If you are in the Association’s register, the system will prompt you to pay Kes 40,000. If not, you will be prompted to enter KYC details and pay Kes 50,000

• Payment will be through Mpesa on receipt of an STK prompt• After the payment has been confirmed, you will receive a text

message confirming successful registration and a link where you can download your Full Membership Certificate

3. Enrollment at AA offices

• Visit your nearest AA branch • Fill in a Full Membership Application form • Make payment either via Mpesa, POS machine or Bank Transfer

Payment Modes

1. Mpesa Paybill: 4078567, Account = Your National ID Number 2. Debit or Credit Card via POS3. Bank Transfer: Co-operative Bank Account :01150993553300

Automobile Association of KenyaRenaissance Corporate Park. Upperhill

P.O. Box 40087-00100 Nairobi0709 933 000/999

www.aakenya.co.ke