1

Results for the year ended 31 August 2017

Group

ResultsPROPRIETARY. Any use of this material without specific permission

of Consolidated Infrastructure Group Limited is strictly prohibited

2

Copyright of information contained in this document is owned by Consolidated Infrastructure Group Limited (“CIG”). You may use this

information and reproduce it in hard copy for your own personal reference use only. The information may not otherwise be reproduced,

distributed or transmitted to any other person or incorporated in any way into another document or other material without the prior written

permission of CIG.

Information in this document is given by us in good faith and has been taken from sources believed to be reliable. We make no

representations that the information contained in this document inaccurate, complete or fair and no reliance should be placed on it for any

purpose whatsoever.

The information contained herein is not intended to serve as financial or other advice. CIG shall not be liable for any loss or damage suffered

by any person or company using or relying on any information and/or opinions contained herein.

CIG does not make any representation regarding any other sources, which may be referenced in this document and accordingly accepts no

responsibility for the content or use of such sources or information contained therein. CIG shall not be liable to any party for any form of loss

or damage incurred as a result of any use or reliance on any information contained in such sources or any sources which can be accessed

through this document.

Disclaimer

3

21%

79%

45%

55%

Group revenue1

South Africa

Rest of Africa

Group PAT

South Africa

Rest of Africa

Group OverviewThe group realised a loss for the year, driven by significant losses incurred in the Conco business. The remaining group

businesses were profitable, including AES

-4%R 4 369m

-138%R -150m

Group Pipeline:R 38bn

Group Order Book: R 6.8bn

+26%

HEPS: -77.9 cents(2016: 255.3c)

-130%

EBITDA1: R 5m(2016: 476m)

-99%

Note 1: Group revenue and EBITDA exclude any contribution from AES as it is equity accounted and is included below the revenue line

PAT Breakdown

-441

291

Conco

Rest of

Group

4

HighMajor project delays devastated marginPoor commercial management

Serious intervention in progress

HighRealised efficiencies have maintained profitability, despite the market contraction

Short term outlook is negative but recovery expected mid 2018

MediumRecord year for revenues and realised strong operational efficiencies

Continue to improve operational efficiencies in light of uncertain demand

MediumDespite tough macroeconomic conditions, achieved a record year for revenue and PAT

Challenging outlook with potential to expand into rest of Africa

MediumA positive year diversifying regionally into new markets

Markets opening up and there is more potential for growth

MediumBusiness brought into the Group, successfully meeting expectations

Leverage group opportunities and grow revenue streams

Low A year of strong revenue growth Need to pivot, long road to build annuity book

LowSuccessful delivery of our first entire power value chain project

Strong outlook, long road to build annuity book

Framing the Problem

Review Outlook

The poor performance this year was caused primarily by challenges experienced in Conco and AES,

which are the most significant businesses in the Group.

Significance

5

5

Funding PositionFY2017 results have put CIG in breach of covenants and a waiver has been secured from funders in support of CIG

Going concern

consideration

Breach of covenants

Loss reflected in Conco lead to a

breach of the EBITDA interest cover

ratio

Funders’ committee

Initial waiver granted subject to

agreed upon course of action

• The group entered into negotiations

with banks and other debt providers

to request a covenant waiver

effective 31 August 2017

• As part of submissions to the forum,

a data room was prepared by

management which included group

budgets, twelve-month cash flows,

forward looking covenant

calculations and group debt

exposures

• The majority of forum members have

subsequently granted the group a

covenant waiver and provided

assurance that current facilities will

remain in place until 15 February

2018.

Conco waiver conditions

To procure an extension of the waiver

beyond 15 February 2018, the

funders’ committee has prescribed

the following conditions within Conco:

• Evaluation of economic returns of all

business units,

• Amended risk procedures

specifically around new contract

acceptance

• Independent detailed review of all

material contracts to evaluate

internal rate of return, project cash

flows and funding requirements

• Contagion mitigation strategy

• Debtors and work in progress

analysis

• Detailed 24 month cash flow, liquidity

and income forecast

Cash flow forecasts indicate

the Group meets liquidity

obligations for ensuing 12

month period

Anticipated return to

profitability in FY2018

Required

Level

Level at 31

August 2017

EBITDA Interest

Cover> 4 times 0.54 times

Net Debt to

Equity< 50% 40.1%

Residual Asset

Value> 1.85 times 2.97 times

Note: Net current assets = R1.35bn, Net asset value = R3.84bn, Net tangible asset value = R2.52bn

No loss of key management

No loss of material market,

customer, or supplier

Support from Funders with the

grant of initial waiver, to be

reviewed February

6

Having isolated the causes of poor performance, CIG has stabilised and is

implementing key initiatives to restore performance

Short Term Outlook

▪ Causes of poor performance in Conco have been isolated and major initiatives

have been put in place to cut costs and inefficiencies, review contract acceptance

procedures and drive economic performance

▪ While we anticipate it will take several months for these measures to gain traction,

Conco is expected to return to profitability as a leaner, more efficient business by

the end of FY2018

▪ Going concern: we have received support from our funders, have sufficient

headroom, and anticipate returning to profitability in FY2018

▪ The group’s focus is on cash generation and efficient use of cash

▪ We look to continue our reputation for reliable execution and excellent customer

service, with no guarantees breached, claims or penalties in the past 20 years

▪ AES likely to decline further short term. Management anticipates the market to

recover towards the second half of 2018

▪ Other businesses in our portfolio are performing well and continue to grow

profitably

7

10 Year JourneyWe have had a remarkable 10 year journey since listing in 2007 and have recently bolstered the team to enable our next

phase of growth

Tamara ParkerB.Soc.sci (psych),

HDE, MBA Joined | 2016

CIG Human

Capital

Wouter du

Preez BCom (Hons), CFA Joined | 2017

CIG Head:

Structured Finance

Raoul

Gamsu

BAcc, CA

(SA)Founder | 2007

CIG CEO

Ivor KlitznerBCom, CA (SA) Founder | 2007

CIG FD

D.C. MooreBSc Electrical

Engineering,

MBA in Finance

(Wharton) Joined | 2011

CIG CIO

R 4369R4 532m

R3 604m

R2 636m

R2 037m

R1 554mR1 446mR1 230m

R745m

R201m

2009 2011 2012 2013 2014 2015 2016 201720102008

CIG acquired

Conco

Achieved >R1bn

revenue

AES included

in results

Tractionel

included

in results

CIGenCo

established

Acquired

100% of

Conlog

10

ye

ar

reve

nu

e g

row

th

FY

Jeremy

FriedmanBCom Acc (Hons),

CA (SA) Joined | 2016

CIG Financial

Analyst

Revenue

CAGR 31%

HEPS

CAGR1%

Profit

CAGR-13%10 year analysis: 1 2 3

8

fin

an

cia

Financial

review

9

364

96

220

-7

-128

99

42

0

-8

EBITDA (R’m)

3 755

485 292

- -

3 441

533 394

- -

Revenue (R’m)

Consolidated Financial PerformanceModerate revenue decline and the reduction of Conco’s margin resulted in a loss in FY2017

-8% -135%

Revenue EBITDA Revenue EBITDA

+10% +3% +35% +91%

Revenue EBITDA

N/A -63%

Revenue Income from equity-

accounted investment

N/A -16%

Revenue EBITDA

Note: O&G profit margin maintained, liquidity strong.

Note 1: “Corporate” segment serves the group in providing management assistance for which fees are allocated intra-group.

Note 2: “Oil and Gas” segment is comprised of the investment in AES which is an equity accounted joint venture. Income is recognised separately from the operations of the rest of CIG.

Note 1 Note 2

CIG

2017: 4 369

2016: 4 531-4% -99%

CIG

2017: 5

2016: 476

136

51

2016 2017

Income from equity-

accounted investment

(R’m)

2016

2017

10

169

45

11

136

32

-305

47 24

51 33

Consolidated EarningsLosses in the Power segment lead to a HEPS loss of 77.9 cents per share

Note 1: Weighted average number of shares for HEPS increased due to rights issue during the year to acquire Conlog.

Note 2: Impact of HEPS adjustments to PAT per HEPS disclosure requirements.

PATHEPS

2017

-138%

2017

-130%

Major difference between EBITDA and PAT: interest

cost on working capital funding

.

Decreased Angolan oil production; still profitable

with strong cash flow

Rights

Issue

Increased number of shares from rights

issue diluted HEPS. Conlog achieved strong

results, contributing positively to HEPS

despite dilution

2016 2017HEPS

ADJ

HEPS (cents)Profit After Tax (R’m)

Rights

Issue

Note 1 Note 2

Comparable FX

impact on HEPS

2016

2017

0.11

(0.20)

2017: - R150m2016: R393m

CIG

2017: -150

2016: 393 -138%

2016

2017

11

Financing activities2017: 6572016: 564

FX movement2017: 72016: 3

Group Cash FlowsMajor group cash flows in FY17 stemmed from the investment in Conlog, majority funded via a successful rights offer

CIG Cash Flows (R’m)

Operating cash flow

Investment in NWC

Net finance cost and

tax paid

Operating activities2017: -2842016: -419

Opening C&CE Closing C&CEInvesting activities2017: - 9482016: - 614

Proceeds on rights offer: R 721m

Investment in Conlog: R 856mBalance funded using on-balance sheet cash

Major financing inflow and investing outflow:

investment in Conlog

Note 1: C&CE: Cash and cash equivalents

12

Group Working Capital ManagementManagement was not effective in reducing the investment in working capital in FY2017; this is a primary focus area for FY2018

Focus

Areas2 3 4

305332

299

228235

2214

14

1422

-156-221-216

-153-152

171

125 97 88

105

20172016201520142013

Debtors days Inventory days Creditors days Net days receivable

Shorten Conco debtors days

through more effective collections,

collection of large outstanding

payments causing distortion, and

lower expected growth rate

1Reduce use of overdraft

facility used to finance

equipment overheads gap

Sourcing deal-

specific trade

finance

Matching creditor payments

to debtors receipts and

negotiating favourable

receipt and payment terms

162209

98

83 45

43

20172016

Breakdown of debtors days

Trade andotherrecievables

Accountsrecievable +retentions

Costs incurred+ recognisedprofit

Note: Current debtors days is distorted

due to slow City Power payment, in the

process of being resolved

13

Working Towards Efficient Use Of DebtDebt is strategically used to raise the liquidity required to support the extensive working capital investment that is key to CIG’s

growth

596

2016

Sources of liquidity for headroom1 (R’m)

Cash on hand Undrawn facilities

360

2017

Revolving GSTBF

2017: R371m

2016: R38m

Structured note program

Value of notes in issue

2017: R924m

2016: R960m.

New notes issued in FY2017: 0

Notes repaid in FY2017: R36m

.

Total long and

short term facilities

2017: R1.737bn

2016: R1.426bn

Foreign sources of debt

Source cheaper USD or EUR

denominated debt, lowering group cost

of capital for ROIC hurdle rate used to

evaluate projects and investments

Note 1: Headroom = difference between available cash facilities and utilised cash facilities

Note 2: R150m 5-year loan raised off the Conlog balance sheet to replenish cash on hand at a group level. Raised post year-end but pre-reporting date

204 239

302

179

FY18 FY19 FY20 FY21

Note maturity buckets.

Future liquidity requirements

Lo

ng

te

rm d

eb

t

Risk management

EBITDA interest cover

2017: 0.5 times

2016: 4.4 times

Net debt-to-equity

2017: 37.8%

2016: 26.1%

Hea

dro

om

Ris

k m

an

ag

em

ent

Strategic

Focus

Areas

Increased use of trade finance

Match debt maturity and currency with

underlying cash flow requirements

Raise debt leveraging cash

generative businesses within CIG.

Use cash-generative group businesses as

security to raise debt for group use

Working capital facilities: R200m

Performance bonds and

guarantees:

In issue: R1 628m

Headroom: R1 800m

Cash balance and facilities on hand are sufficient to meet the short-

term operational requirements.

Note: The full value of notes outstanding has been reclassified to

current liabilities in accordance with IAS 1.74

For purposes of the covenant calculation, EBITDA includes income from joint arrangement and excludes unrealised forex gain or losses

Trade finance

2017: R442m

2016: R428m

Sh

ort

te

rm fa

cili

tie

s

14

op

era

tio

Operationalreview

15

Power

16

Contribution to

group profit2016: 43%

0%

FY2017 Revenue

growth 5 year CAGR: 11%

-8% 10%

2016

EBITDA Margin

-4%

2017

Power Sector

Performance

Revenue significantly impacted by uncertainty

▪ Missed revenue caused by significant delays in project

commencement

▪ Uncertain ability to recover revenue from scope overruns on

three material projects

Team retained at the expense of margin

▪ Continued investment in international operations in anticipation

of growth

▪ Projects taken on at reduced margins following delayed order

book unwind and pipeline conversion

▪ Retained our skilled team

Diversification strategy into new regions

▪ Entry into new markets has contributed towards slow

conversion of our pipeline

▪ Progress in new markets is still below expectations

Growing revenue streams

▪ Latest acquisition provides reliable cash flow

▪ Start-up businesses have made good progress

Significant project overruns, a brutal South African operating

environment, and moderate international growth lead to a

disappointing year for the power sector

3 755

3 441

2016 2017

Revenue (R'm)

364

-128

2016 2017

EBITDA (R'm)

-305

169

20172016

PAT (R'm)

17

Conco is the largest Africa-based turnkey EPC provider in sub-Saharan

Africa, offering high voltage turnkey electrical substations, overhead

power lines and renewable energy solutions

Review: A tough year in a challenging macroeconomic environment

▪ Scope overruns: $26m in scope overruns with uncertain ability to recover costs

▪ Further delays in renewable energy projects: IPP Round 4 impacting order book by an

estimate of R2.4bn and revenue by R800m

▪ Delays in order book conversion: Only realised R530m of an expected R2.3bn in South Africa

▪ Wrong mix of work: Sub-optimal work with minimal economies of scale

▪ Regionalisation strategy: Dedicated management has been appointed in the countries serviced

Outlook: Business is consolidating and taking steps to fix operational

challenges

▪ War room initiative: to fast track adoption of key initiatives

▪ Improving project margins: Current project underway to save R100m in operational cost

▪ Cashflow management: Improve working capital cycle, borrowing costs and payment terms

▪ Focused international footprint: Strategic review in process to entrench analytical approach to

entering market niches

▪ Stable order book: Uptick since August with an improved orderbook mix

▪ IPP Round 4: Execution expected to begin from February 2018

Proven ability to execute

Product agnostic turn-key offering

/ /Strategic Advantage

Registered

offices

57%

43%

Revenue split by geography

RevenueR 2.9bn

-21%

98%

2%

Revenue split by product

Local expertise and partners

/ Highly skilled team

Conco

Project footprint

South Africa

Rest of Africa

Renewables

Traditional

David van

ZylCEO

David has over 20

years’ experience

in the power and

electrical industry

Slu GeshaMD Conco South

Africa

Slu has over 24

years’ experience in

the power and

electrical industry

Retief de VilliersMD Conco

International

Retief has over 27

years’ experience in

the power and

electrical industry

18

Conco Performance ReviewContributing factors have been identified and isolated, and remedial action is being taken What went wrong How we are fixing it

The poor performance this year arose primarily in Conco, while

management’s ability to react timeously was insufficient

Having identified and isolated the contributing factors as to what went wrong,

remedial action is being taken

▪ Lower than expected revenues, specifically due to delay in Round

4 IPP

▪ Nature of engineering and construction projects requires a high

degree of management estimation and judgement. Changes in

assessment may well result in material variances

▪ Delayed recognition of contractual issues requiring urgent

management intervention, caused as a result of high regional

growth and increased complexity of operations

▪ Margin erosion, caused by downward pressure from clients in

contract negotiations, and tendering at lower prices in an effort to

gain market share regionally and maintain market share in SA in

a contracting market

▪ Rising compliance and regulatory costs in SA resulting in cost

creep

▪ Investment in retention of highly-skilled key personnel, causing

low labour utilisation and overallocation of resources to projects

▪ Failed recovery of additional costs incurred on industry standard

operational issues such as disruptions, delays and scope of work

adjustments

▪ A “war room” has been established, under the supervision of CIG, to drive accountability

internally and the rapid adoption of key organisational changes, detailed below

▪ Tighter control in the contract approval process:

▪ Advance approval of all new bids in excess of R50 million

▪ Approval of all major scope and cost changes

▪ Approval of all cost saving initiatives

▪ Assessment of the economic benefits of all current projects

▪ An independent business review to assess the economic performance of each business

unit to ensure a refocus within Conco on economic profit

▪ Independent specialist advising on the upgrade and refinement of accounting processes

to improve accuracy and speed of reporting

▪ Targeting R100m in annualised cost savings through a combination of bonus sacrifice,

salary increase sacrifice, correction of band creep and overhead cost reduction

▪ Commencement of Round 4 IPP’s is expected no later than March 2018

▪ The pipeline of confirmed orders is satisfactory with positive medium-term prospects

▪ The group is actively increasing its mix of private sector work

▪ Diversification of Conco's client base and regional footprint to reduce project

concentration risk

The board believes the remedial action put in place is in the best interest

of the group and all its stakeholders and will result in solutions which

materially contribute to the remedying of the problems identified and to

restore the confidence of stakeholders

In spite of poor financial performance, Conco

has maintained excellent working relationships

with its clients and has not been exposed to

liability for damages or penalties

19

2.10.6

6.4

8.213.2

10.21.7

1.2

2.2

0.4

0.4

9.9

12.3

15.3

28.6

FY15 FY16 FY17

1.72.1

1.35

1.2

2.5

2.32

1.1

0.05

2.40

1.0

0.35

0.02

3.0

1.8

0.3

4.0

5.0

6.10

FY15 FY16 FY17 FY18 FY19 FY20

Order book unwind2

R’bn

Current order book1

Pipeline

R’bnR’bn

25%

21%

Order bookPipeline breakdown3 Pipeline weighting4

R’bn

Conco Order BookThe order book and pipeline remain stable, but conversion rates on pipeline projects have decreased as we have spread into

new regions

We have cultivated a healthy pipeline, with

R19bn carrying a probability weighting

greater than 50%

Due to project delays from the prior year, a

significant amount of the order book is due for

execution in FY2018

Note 1: Order book represents guaranteed work with signed contracts in place

Note 2: Showing the period over which the FY2017 order book revenues are

expected to be realised

Note 3: Pipeline represents tenders awaiting adjudication and excludes tenders won

Note 4: Pipeline weighting represents managements' probability weighting of tenders awaiting

adjudication

Rest of Africa Renewables

SA Renewables

Rest Africa Traditional

SA Traditional

Order book unwind

3.1

15.9

9.7

Pipeline weighting

<50%

50% - 89%

>90%

28.6

Note: only 25% of FY2018

orderbook is expected in

the first 6 months

20

/ /

ConcoESConcoES is the largest secondary plant supplier in South

Africa, offering customised secondary plant solutions to

protect and automate EHV, HV and MV electrical

infrastructure, and small scale PV generation

Outlook: Strong growth outlook for micro grid and secondary plant

solutions

▪ Diversification of partners: Increasing engagement with private sector clients and other EPCs

▪ Focus on emerging trends: Smart grids, rooftop PV & DC storage

▪ International footprint: Establishment of regional offices and further project partnerships

▪ Growing annuity revenue: Automation contracts for utilities

Andreas

RichelmanMD

Andreas has over 19

years’ experience in

the power and

electrical industry

In-house product development

Tailored turn key solutions

Low working capital requirements

Strategic Advantage

Review: A positive year diversifying regionally into new markets

▪ Commencement of micro grid project: First in Tanzania

▪ Reduced reliance on Conco: 50% of revenue is now generated externally

▪ Regional diversification: Increased footprint across Africa

▪ Power project completion: 2 x 5MW Gobabis project completed in Namibia

▪ BEE: Achieved level 2 BEE Rating

Registered offices

59%

41%

Revenue split by client

RevenueR 481m

(R 296m eliminated on

consolidation)

+62%

54%37%

9%

Revenue split by product

Order bookR 216m

(Including R110m of

Conco order book)

-10%

Project footprint

Renewables (PV)

Traditional

Conco

Non-Conco

Automation contracts

21

/

CPMCPM is the only large scale South Africa based company offering long

term operational and maintenance services to wind farms and solar

parks for municipalities and utilities throughout sub-Saharan Africa

Review: A year of strong revenue growth

▪ Restored business to profitability: Following a loss making year in FY2016

▪ Successful management of 20 renewable energy contracts: Contributed to 60% of

turnover

▪ Diversification from renewable energy projects: Won more transmission and distribution

maintenance work

Outlook: Markets opening up and there is more potential for growth

▪ OEM maintenance contract restrictions lifted: Allows CPM to tender for longer term projects

▪ Opportunities to leverage off Group synergies: Opportunity to complement work done by Conco

▪ Customer retention: Existing renewable energy projects for FY2018 continue and have started an

annuity project outside of South Africa

▪ Growing annuity revenue: Pursuing operational and maintenance contracts

Pius N. GumbiCEO

Pius has over 20 years’

experience in the power

industry in the UK and

African utilities

Strategic Advantage

Localised presence with BEE Level 2 rating

Ability to service multiple OEMs

/

Registered offices

12%

88%

Revenue split by geography

RevenueR 48m

+67%

Order bookR 62m

148%

16%

60%

24%

Revenue split by product

World class experienced team

Project footprint

Renewables

Powerform

Transmission and distribution

South Africa

Rest of Africa

(Including projects and

annuity contracts)

22

/

CIGenCoCIGenCo takes minority stakes in power generation

infrastructure projects and specialises in financing, developing,

constructing and operating generation plants in Sub-Saharan

Africa

Review: Successful delivery of our first entire power value chain

project

▪ Delivery of Ejuva Solar Energy Projects in Namibia: A first of its kind in Namibia,

executing as a late stage developer, turning the failing project into a reality

▪ First year revenue composed only from project management fees: Now annuity

revenues from operations have started to flow

Outlook: Strong growth prospects going forward

▪ Strong pipeline: 10 projects totaling 524MW but might not generate revenue in FY2018

▪ Capital raising: Ring-fenced financing arrangements available from extensive sources

▪ Capital constraints: CIG is currently unable to make large equity investments

▪ International footprint: Pursuing strong leads in over 5 countries

▪ Growth in annuity revenue: Strong pipeline will result in growing annuity revenue flows

Wilfred

Bassaragh CEO

Wilfred has over 25

years’ experience in

the electric power

industry

Strategic Advantage

Late stage project development niche

Local expertise and partners

Access to multiple revenue streams

/

Registered offices

RevenueR 23.7m

(First year of

revenue)

100%

Project footprint

Generation

assets under

operation

10MW

524MW

Potential

generation

projects in the

pipeline

Pipeline footprint

23

CIGenCo was able to harness the holistic CIG offering across the power value chain

and deliver a successful project to unlock annuity revenue for the Group

Gobabis Success

Activation▪ CIGenCo leveraged group networks to activate the project

▪ CIGenCo provided equity funding through a 49% minority stake

▪ Financing package is ringfenced from the CIG Group

▪ Capital was raised from institutional investorsRevenue Stream: Financing income

Development▪ Successful partnerships with local expertise to develop local skills and jobs

▪ Partnered with Conco to provide the turnkey EPC work

▪ ConcoES provided the secondary plant solutionsRevenue Streams: Development and project management fees

Maintenance▪ CPM will provide ongoing maintenance of the project

▪ CIGenCo will support the operations of the projectRevenue Stream: Maintenance fee and dividend yield

Won and successfully executed on 2 renewable solar PV power plants

▪ Sponsor – CIGenCo

▪ Receiver – Namibia Power Corporation Limited

▪ Focus – Renewable energy

▪ Income – 25 year annuity revenue

24

/

ConlogConlog is an electronics design company, offering the world’s largest

base of smart meters and prepaid solutions. The business provides the

complete end-to-end solution covering management systems, vending

architecture, prepaid meters and systems management

Review: Business brought into the Group, successfully meeting

expectations

▪ Acquisition of Conlog: Concluded successfully and seamlessly

▪ Successful execution of export strategy: Generated 75% of revenue outside of SA

▪ Leveraged Group synergies: Benefits from relationships opened up by CIG

▪ First PLC prototype piloted: Developed and designed to market specifications, enabling us to

penetrate new markets

▪ Delay in microchip supply: Still lagging and expecting to catch-up in December. We have more

demand that we are able to fulfil

Outlook: Leverage Group opportunities and grow revenue streams

▪ Cross-selling opportunities: Between CIG and subsidiaries

▪ Returning customers: Emerging trend in cost conscious customers returning due to quality

product and service offering

▪ Grow services offering and annuity income: Opportunity to grow annuity income from a base of

2%

▪ International opportunities: Large growth potential in regions where CIG has extensive

experience

Logan MoodleyCEO

Logan has over 15 years

of experience at Conlog

Strategic Advantage

Market leaders in Africa

Niche electric ecosystem

Leverage strong brand, skills and pipeline

/

24%

76%

Revenue split by geography

4%

96%

Revenue split by product

RevenueR 465m

(10 months

consolidated, since

acquisition)

Products

Services

Registered offices

Sales footprint

Rest of the world

South Africa

Note: sales in South America and Asia

not reflected above

25eBay may be a shark

in the ocean, but we

are a crocodile in the

Yangtze. If we fight in

the sea we lose, but

if we fight in the

river, we win.

Jack Ma, Alibaba

“

”

26

Building Materials

27

CBMCBM is a building materials business made up of West End Clay Brick

& Roofing, Drift SuperSand and Drift Laezonia, offering top quality

bricks, rooftiles and aggregates for the building and construction

industry

Review: Record year for revenues and realised strong operational

efficiencies

▪ Rewarding investments: Laezonia quarry output increased by 50%

▪ Operational efficiencies: 1:1 production to sales ratio with zero wastage and reduced

logistics costs

▪ Automation and quality control: Increase in production at West End Clay Brick plant

Outlook: Continue to improve operational efficiencies in light of

uncertain demand

▪ Large construction developments: Expanding out towards Lanseria

▪ Robust demand: Public infrastructure service delivery in houses and hospitals

▪ Maintenance of current production: Monthly production of 120 000 tons from quarries

Jannie HoomanCEO

Jannie has over 23 years’

experience in the

aggregates industries/ /Strategic Advantage

Highly skilled management and operational teams

Ability to execute efficiently

Strong customer base

Registered officesContribution to

group profit2016: 11%

+22%

32%

26%

42%

Revenue split by product

Revenue R 533m

+10%

Drift Laezonia

West End Clay Brick & Roofing

Drift Supersand

28

Rail

29

TractionelTractionel is the leading railway electrification company in

South Africa, offering turnkey solutions for the installation and

maintenance of transmission lines, substations, and other

railway services mainly to Guatrain, Transnet and PRASA

Review: Despite tough macroeconomic conditions, achieved a record

year for revenue and PAT

▪ Awarded significant projects: Secured Majuba, the largest project in the companies history

▪ Downward trend with PRASA and Transnet: Cancellation of the Braamfontein depot

Outlook: Challenging outlook with potential to expand into rest of Africa

▪ Order book: Order book reduced due to fast rate of execution, however the uptick in new orders

has not been commensurate

▪ International footprint: Expand maintenance offering through established MOUs

▪ Expansion of service offering: Diversify into signalling and maintenance of rail infrastructure

▪ BEE rating change: Obtain level 2 BEE rating

▪ Diversify into new rail services: Maintenance of rail infrastructure

Danie LubbeCEO

Danie has over 11

years experience at

Tractionel

Exclusive affiliations with international providers

/Strategic Advantage

Niche railroad product offering /

Proven

ability to

execute

Registered offices

Contribution to

group profit2016: 3%

11%

96%

4%

Revenue split by product

Revenue R 394m

+35%

Order bookR257m

- 49%

Maintenance work

Project work

30

Oil and Gas

31

AESAES offers fully integrated waste management services to the oil and

gas industry, encompassing the collection, recycling and disposal of oil-

based waste created during the drilling process

Review: Business has remained profitable through realising efficiencies,

despite the decrease in number of active rigs

▪ Operational and cost efficiencies: Significant steps were taken to reduce and manage cost

▪ Outsourcing strategy: Outsourcing of the thermal desorption process has enabled the business to

scale according to demand

▪ New contracts awarded: Surface rights for landfill in Luanda and integrated waste management

contract in Soyo

▪ Minimised liabilities: No in-country debt and healthy cash balance

Outlook: Short term outlook for Angola oil and gas market is negative

however recovery expected in mid 2018

▪ Stabilising market: We expect the number of active oil rigs to decrease through December 2017

and pick up from April 2018

▪ Servicing of current production: 1.6million barrels produced per day; expected to decrease in

the short-term

Morten Eriksen

Manager

Morten has 15 years

experience in oil and gas

Unique service offering in Angola / /

Strategic Advantage

Efficient scalable operations

Licenced

international

technology

Registered officesContribution to

group profit2016: 35%

+24%

Income from

equity-accounted

investment

R 51m2016: R 136m

-63%

70%

30%

Income split by product

Exploration

Production

32

Angolan

Oil and GasThe need for waste management services will remain

due to the requirement for continued production

Oil’s contribution to Angola’s economy

30%GDP

▪ Government is incentivised to maintain production

levels due to the sheer contribution of oil to Angola’s

economy

▪ President of Angola has recently convened a

meeting between Sonangol and oil operators to

discuss the development of the industry

▪ Discharge law came into effect in January 2016

requiring all oil companies to dispose of waste

responsibly onshore

▪ AES is the dominant company operating in the waste

management service in Angola

▪ All stages of the oil extraction lifecycle require waste

management

▪ Exploration drilling must continue in order to maintain

productivity of the oil producing block

“The medium-term outlook for oil demand is

for a significant increase to 2022 with a

healthy average annual increase.”

Mohammad BarkindoSecretary General, Organization

of Petroleum Exporting CountriesWells drilled Multi wells drilled Drilling

production &

injection wells

Drilling more

production and

injection wells

Infield drilling

Exploration Appraisal Development Production

50%Public

revenues

95%Exports

SOURCE: www.africaneconomicoutlook.org | http://www.scmdaleel.com/category/offshore-rigs/88

https://www.bloomberg.com/news/articles/2017-10-15/opec-sees-healthy-oil-demand-growth-to-2022-as-renewables-gain

33

Str

ate

gy

Longer term strategy

34

Conveying Our IdentityOur identity statement highlights the Group’s core purpose for existence, differentiating factors and offering to clients

We enable basic services

and unlock Africa’s economic

potential

We execute efficiently, we

have deep local expertise,

and we prudently manage

risks

We develop, implement and

support specialised

infrastructure products and

services

Addressing Africa’s basic societal needs

Enabling economic development across Africa

Proven track record of delivery of turnkey projects through

agile project management processes

Focusing on recruitment and retention of a highly skilled

team and investing in local expertise and partnerships

Diversification across industries and geography

Services spanning the entire value chain

Focusing on niche offerings across the power, oil and gas,

rail and building materials sectors

WHY

HOW

WHAT

35

The Operating EnvironmentThrough our unrelenting Africa growth strategy, we have developed a deep understanding of the unpredictable and

challenging nature of the operating environment1

Note 1: The countries listed are the regions the Group perceives have the highest probability of delivering sustainable growth

Nigeria▪ Naira depreciated by 44% from January 2016

▪ Political stagnation and policy uncertainty

▪ Underperforming O&G sector

▪ Annual real GDP growth of 4.8%

Ethiopia▪ During the 2016 drought the government spent $400 million to fight off

famine, negatively affecting government’s budget

▪ Has the highest annual real GDP growth rate in Africa of 9.7%

Kenya▪ Kenya’s October 2017 elections creating policy uncertainty

▪ Kenya IPP delayed till mid 2018

▪ Annual real GDP growth of 5.3%

Angola▪ Oil rigs decreased from 10 to 5 in FY2017

▪ Elections in August 2017 creating policy uncertainty

▪ Sonangol restructured its Board of Directors

▪ Annual real GDP growth of 4.3%

South Africa▪ Rand appreciation by ~21% since January 2016 affecting margins

▪ Three different energy ministers appointed this year

▪ Delays in IPP programs

36

The OpportunityAmidst the challenges, the positive outlook for Africa continues to support an aggressive growth strategy as governments look to

close a rapidly growing infrastructure gap

2018 20192017

3.4%

Normalising the macro-economic shocks of the past year, Africa is

still projected to be the 2nd fastest growing continental economy

in the world and is estimated to grow by 4.7% in 2019

4.3% 4.7%

Infrastructure spend in Sub Saharan Africa is driven by a

large deficit between supply and demand and is expected

to reach $180bn p.a. by 2025

Emerging energy trends in Africa

▪ Renewable energy prices are anticipated to

fall even further, and it is expected to make up

15% of Africa’s energy generation by 2040 (up

from 1% in 2012)

▪ Micro grids can be quickly deployed, linking

power generation much closer to source where

it is too expensive for traditional power

infrastructure to reach

▪ Smart metering allows utilities to reduce

operating costs, improve grid reliability,

increase energy efficiency and improve

revenue collection

$45bn p.a.

2017

$180bn p.a.

2025

30% of which

will be made

up of energy

SOURCE: African Development Bank | PWC | RMB

2.2%

2016

37

Our rationale for business is directed by our strategic drivers and determines how

we extract value from our operating environment

Strategic Drivers

▪ Risk management practice

▪ Enhancing stability in revenue and earnings

▪ Backing strong management teams

▪ Building sustainable partnerships

▪ Higher margins and long term relationships

▪ Stronger-than-market quality guarantees

▪ Synergies throughout the Group

▪ Develop management and strategic skills

We address basic societal

needs

We unlock potential in our

businesses

We offer specialised

products and services

We diversify by region and

industry

We remain agile through a

decentralised business model

▪ Growth in the demand for infrastructure

▪ Invest ahead of the curve

38

Sector DiversificationWe manage the volatility in our operating environment by diversifying our operations across multiple sectors and multiple

product offerings

Power

Project activation• Developers of renewable

energy power generation

Infrastructure development• High voltage electrical

substations

• Overhead power lines

• Renewable energy (wind and

solar)

• Customised secondary plant

solutions

Operations & maintenance• Long-term operational and

maintenance services

Downstream• Prepaid meters and support

software

Building Materials

Aggregates • Crushed stone and rock

for application in roads,

readymix and concrete

Roof tiles• Manufacture of concrete

roof tiles

Bricks• Manufacturing of face,

semi-faced and plaster

clay bricks

Rail

Railway electrification• Overhead transmission

lines

• Substations up to 132kV

Maintenance• Installation and

maintenance of railway

electrics

• Railway maintenance

services to Gautrain,

Transnet, PRASA and

private siding owners

Oil and Gas

Waste management• Full integrated waste

management services

• Collection, recycling

and disposal of oil-

based waste

39

55%56%

83%

78%

79%

2.04

2.64

3.60

4.53 4.37

Geographical DiversificationFurther diversification across regions has yielded consistent smooth revenue growth

▪ We have historically experienced consistent upward revenue

growth and have been protected from macroeconomic swings in any

one region due to our geographical diversification strategy, with

operations in 24 countries across Africa and the Middle East

▪ We have a specific focus on diversifying away from South Africa which has been very disruptive to the business

▪ This year has however been disrupted by scope overruns in several

large projects internationally as well as a brutal South African operating

environment

Rest of AfricaSouth Africa

2013 2014 2015 2016 2017

Rest of Africa

South Africa

Group Revenue (R’bn)

40

Diversified Business ModelsWe have diversified our business models, building a cash generative base and establishing annuity

revenue streams to balance our project-based businesses

▪ Our project-based businesses

are driving revenue growth.

These businesses must be

measured on a 2-3 year cycle

Rec

urr

ing

reve

nu

e

Vo

lum

e-b

as

ed

reve

nu

e

Pro

jec

t-b

as

ed

reve

nu

e

PowerBuilding

MaterialsRail Oil and Gas

▪ Our volume-based businesses

provide a firm cash generative

base for the Group

▪ Our recurring revenue businesses

are in their nascent state, but have

considerable ability to scale and will

generate stable income for the

Group in the long term

41

Activate

Feasibility,

finance and

structuring

Design and planning

Manufacturing and material

supply

Construction and

Implementation

Integration

and

commission

Operation and

maintenanceDownstream

Project Project Project Project

Project Project

ProductProject Project

Annuity

Development

funding interest

Project

management fee

Return on equity;

Asset management

Product Time-basedLicencing;

Time based

Product

Project Project Project Project Annuity

Annuity;

Transactional

Conco

ConcoES

CPM

CIGenCo

Conlog

CBM

Tractionel

AES

Primary activity Secondary activity

Value Chain ExposureWe operate across the full power value chain and pursue niche opportunities in other industry pillars

Develop Implement Support

42

Managing Operational RisksWe are focused on the risks inherent in our environment and have developed mechanisms to manage these risks

Risk Relative Exposure Mitigation

Currency risk ▪ Match exposures between suppliers and customers where possible

▪ Structured FX contracts to manage exposureMinimal currency risk at

operational level

Payment risk ▪ No defaults incurred by CIG debtors

▪ Payment tolerance factored into working capital management strategyDelayed payments, not

defaults

Repatriation risk ▪ Risk is predominantly in Angolan operations

▪ Track record of successful repatriation with full legislative complianceLimited exposure and

efficiently managed

Client

concentration risk

▪ Active focus on regional diversification

▪ Client exposures managed individually relative to credit riskLow individual client

concentration

Africa risk ▪ 10 years history of successfully doing business in Africa

▪ Local African presence with teams on the groundLow due to track record

and experience

Project

concentration risk

Diversifying revenue

streams

▪ Matching payment profiles, efficient working capital management, and

diverse pipeline reducing key project risk

▪ Have not yet reached a scale where we are sufficiently diversified to

withstand major project delays

43

Mid-term Focus Areas

Objective Result

Pip

elin

e

Focus on synergies

• Through facilitating introductions into

new regions, particularly in but not

limited to Conlog

Focus on diversification

• Specifically business model and client

diversification

Shorter sales cycles

and better

conversion rates

Team

Focus on management

• Human capital executive to focus on

management development

Focus on local team and partners

• Build further trust through becoming an

advisor, not just a provider

More negotiated

work and longer

term clients

Ca

pit

al

Focus on annuity income

• Growth of CIGenco and CPM off the

back of successes

Focus on capital allocation

• Particular focus on Conco to embed

cultural adoption of a focus on capital

efficiency, however legacy projects must

still be executed

More efficiencies

and better use of

capital

Our focus in the medium term is weighted towards growing capabilities within our team and continuing growth of our pipeline

1

Pipeline

2

Team3

Capital

Triangular

paradox

44

The fundamentals of our business remain, and we are excited to deliver increasing

shareholder value as we grow

Investment Case

Delivering infrastructure growth

in Africa

▪ Africa’s infrastructure gap is large and growing

▪ Requiring extensive infrastructure spend

▪ Consumers driving demand for basic services

▪ Positioned to capitalise on macro trends

Through a specialised offering▪ Services spanning the entire power value chain

▪ Targeting niche offerings

▪ Providing sustainable margins

Protected by diversified risk▪ Diversified across geographies

▪ Diversified across industries

▪ Diversified across business models

With talented and experienced

management teams

▪ Experience in operating in Africa

▪ Local expertise with strong networks

▪ Ability to attract, deploy and retain talent

With a recognised ability to

execute

▪ Deliver turnkey projects through agile project

management processes

▪ Product agnostic offering

And a proven track record▪ Market leaders in our fields

▪ Evidenced by our strong 10-year growth story

▪ Track record of innovation and quality

45

co

nta

ct

Contact

46

L O C A T I O N

First Floor, 30 Melrose Boulevard,

Melrose Arch 2196

T E L E P H O N E

+27 11 280 4040

E M A I L

info@ciglimited.co.za

W E B S I T E

www.ciglimited.co.za

47

ap

pen

di

Appendix

48

SA Operating EnvironmentDisruptions at utilities and municipalities has hampered progress to infrastructure development

11% Group

exposure to

Group companies exposed

to Eskom

CEO: Sean Maritz

▪ Four different CEO’s since November 2016

▪ Eskom's credit ratings downgraded to Ba2 in June 2017

▪ Of the R350bn government guarantees available to Eskom R210bn has been drawn down already1 and 2

▪ Possible options are government underwriting, IMF bailout or a restructuring

▪ Two cabinet reshuffles, three different ministers since March 2017

Department of energy Energy minister: David Mahlobo

▪ CIG is diversifying away from Eskom and RSA

▪ Increasing trend in mix of private customers

Source: www.businesslive.co.za/bd/economy/2017-05-10-state-guarantees-of-r466bn-unlikely-to-explode; Eskom AFS;

http://www.saaea.org/news/category/reipppp; New Power Generators RSA,CSIR,14 Oct 2016

REIPPP timeline

Municipalities▪ Lack of decision making in municipalities have reduced the number of tenders awarded this year

2014 2015 2016 2017

Mar- R3.5 Bid

submissions

Aug- R4 Bid

submissions

Apr- R4 Bid

announcement; 27

projects representing

~R60bn

Dec- R3.5 Bid

announcement

Oct - SAWEA

lodges formal

complaint

with Nersa

Feb- President Jacob Zuma’s instructs Eskom to sign the

outstanding PPAs in State of the Nation address

Feb- Outa submission to Competition Commission

Mar- Mmamoloko Kubayi appointed as DOE minister

Apr- Tina Joemat-Pettersson deadline to sign the PPAs

Sep- Eskom acknowledge legal obligation to conclude PPAs

following high court ruling

Oct- Kubayi’s deadline to sign the PPAs, price cap set to

R0.77/kWh

David Mahlobo appointed as DOE minister

49

Clean Energy TrendsRenewable energy generation in Africa is expected to see growth in the foreseeable future driven by large capital inflows and

high demand

African energy generation by source

3%4% 3%2%

3%

26%

3%4%

25%

27%

1%

22%

3%

9%

9%

56%Coal

Hydro

Other renewables

Nuclear

Gas

Oil

2012

Nuclear

Biomass

Concentrated solar

Wind

GeothermalSolar PV

Hydro

Coal

2040

Oil

Other

renewables

15%

Gas

2012 Total generation:

440 TWh

2014 Total generation:

1 540 TWh

$62B

2004

$349B

2015

Global investment in renewables: for

the first time, in 2015, developing

countries attracted the majority of

renewable energy investments.

61% - Growth in renewable generating capacity since

2012. New generating capacity fuelled by renewables

has exceeded that fuelled by non-renewables by a

widening margin.

60 - The number of countries globally where solar is the

cheapest form of energy to produce, Solar PV costs are

now half of what they were in 2010 and could fall by

another 60% over the next decade.

Benefits - renewables are well suited for Africa as they

can be built quickly to match countries needs and are

adaptable in there application.

Example - New Scaling Solar mandate in Zambia will

begin with an initial procurement round of up to 200 MW

of utility-scale energy, with subsequent rounds to follow

with a goal of developing 500 MW of renewable power.

SOURCE: www.bp.com/en/global/corporate/technology/technology-outlook/energy-resources.html; http://www.iea.org/publications/freepublications/publication/keyworld2014.pdf;

www.irena.org/DocumentDownloads/Publications/IRENA_REthinking_Energy_2017.pdf

50

Conco Working Capital ManagementManagement was not effective in reducing the investment in working capital in FY2017; this is a primary focus area for FY2018

▪ Negotiating more favourable trade terms with

suppliers

▪ Closer matching of creditor payments to

debtor receipts

Potential risks:

▪ Lean WC management introduces a level of

operational risk, requiring careful planning and

execution. In the short term, heightened

oversight is required

▪ Theoretical reduction in financing cost may

improve margin, however, suppliers may look

to increase pricing due to less favourable

terms

50%

3% 3%8%

20%10%

5% 2% 2%

2 4 6 8 10 12 14 16 18

Civil works andoverheads

Construction andassembly

Commisioning andintegration

2 4 6 8 10 12 14 16 18

Civil works andoverheads

Construction andassembly

Commisioning andintegration

2% 3% 5%15%

40%

20%9%

3% 3%

2 4 6 8 10 12 14 16 18

Civil works andoverheads

Construction andassembly

Commisioning andintegration

▪ Larger projects with longer timelines greater

complexity have lead to the build up of

working capital

▪ Historically equipment was procured early, in

order to reduce operational risks and

complexity

▪ Through our growth in the experience curve

we are able to manage this working capital

investment more closely going forward

▪ Have to pay trade creditors earlier using bank

funding

▪ WIP has a slower, more gradual unwind.

Current WIP is distorted due to current phase

of the Ethiopia project

▪ Debtors shouldn’t have come down yet, but it

will towards the end of the cycle. Current

debtors is distorted due to slow City Power

payment, soon to be resolved

Reduction in gross working capital

for the same project cost Cumulative costs incurred

Costs incurred

Historic approach Targeted approach Working capital saving

WC build over time Focus on cash flow management Challenges

Month