q1 fy17 report - kickstart internationalkickstart.org/wp-content/uploads/2016/12/q1-fy17... · q1...

Q1 FY17 REPORTJuly 1, 2016 - September 30, 2016

OVER VIE WThe first quarter of FY17 marks the start of the second year under KickStart’s 2021 strategic plan. The

partnership-based model introduced over the course of last year continued to enable the organization to

scale our impacts and create more profitable new opportunities for poor farmers across 16 countries in Africa

where irrigation is most needed to secure food production and livelihoods.

The reorganization of our global operations in alignment with the new strategy is now complete: By the

close of Q1, all former country programs were integrated into one of the three regional hubs established in

FY16, each led by a Regional Head of Partnership and Sales. The final step in this process was recruiting and

transitioning a new Kenya Country Manager to lead partnership and sales efforts in the country, reporting to

the East African Regional Manager.

Kenya is also home to KickStart’s Innovations Hub. The Innovations Hub encompasses both product

development, where new irrigation solutions are designed and tested, as well as experiments around

innovative new marketing and outreach techniques to reach last-mile customers and specific target groups,

such as youth and female farmers. To lead these efforts, KickStart’s former Kenya Country Director, John Kihia,

was appointed Director of Field Innovations, reporting directly to the CEO. John will lead a small team to focus

exclusively on developing new models and mechanisms for getting MoneyMaker pumps to the farmers who

need them most and ensuring that these farmers realize maximum impacts from adopting irrigation. These

activities will be highlighted under the Innovations Hub section of this and future quarterly reports.

With the staffing and operational structures to effectively work through partnerships fully in place, this

quarter, KickStart focused on continuing to improve our value proposition for these groups. In addition to

incorporating high-quality MoneyMaker pumps into partners’ programs, we have equipped our team to offer

complementary agropreneurship training for both partners’ staff (training of trainers, or TOT) and farmers in

their networks. KickStart’s lead training officer developed these trainings around how to plant, irrigate, grow,

and sell high-value crops. The trainings are then customized depending on the needs of a particular partner.

In Q1, agropreneurship trainings were carried out among close to 1,000 farmers and 10 partners in Tanzania

and in Ethiopia.

Q1 FY17 REPORT - KICKSTART INTERNATIONAL page | 1

Q1 FY17 IMPAC TS

3,585PUMPS SOLD

2,700FAMILY FARMING

BUSINESSES CREATED

13,400PEOPLE LIFTED

OUT OF POVERTY

134,400 PEOPLE FED WITH FRUITS &

VEGETABLES ANNUALLY

$2.3 MILLION/YEAR PROFITS AND WAGES EARNED

FOR ONCE POOR FAMILIES


SALES AGAINSTANNUAL GOAL

By the end of Q1 FY17, KickStart sold 3,585 pumps -- 12% of our annual goal.

Working through partner organizations and distributors, pump sales often come through in uneven, large bulk orders. Given that the nature of our business includes an ebb and flow of orders, KickStart reports our quarterly pump sales against the annual target of 30,000 pumps.


This quarter, sales and impacts across all regions grew 48% compared to the same period of the previous year,

Q1FY16, with 3,585 pumps sold, nearly 2,700 profitable businesses created, and over 13,400 people lifted out

of poverty. KickStart’s agropreneurship support offerings and other new innovations, as they are developed,

will enable the organization to continue to attract new partners to drive the uptake of irrigation while also

better serving farmers.


• KickStart’s team sold 2,271 pumps in East Africa during Q1.

• Sales in the region grew more than 66% over East Africa sales from the same period last year.

• More than 1,000 pumps were sold in Uganda, Rwanda, and South Sudan in Q1FY17. These are all relatively new markets for MoneyMaker pumps where KickStart established local supply and partnership networks and built demand for irrigation over the course of FY16. Sales in all three of these countries also exceeded Q1 targets by more than 100% and by close to 300% in the case of South Sudan.

• Tanzania faced human resource challenges that hindered results. Replacements for two underperforming partnership and sales officers will be recruited in the next quarter.

• While the size of the sales team in Kenya was reduced dramatically in restructuring KickStart’s programs to align with our partnership-based strategy, Q1 sales remained fairly consistent from FY16 to FY17, demonstrating the increased efficiency of the leaner present structure.

E A S T AFRICA


KENYA • TANZANIA • UGANDA • ETHIOPIA • RWANDA • SOUTH SUDAN

Pictured below: A MoneyMaker pump training in Tanzania

• KickStart’s team sold 667 pumps in Southern Africa during Q1.

• Southern Africa was the only region that did not experience positive growth in quarterly sales compared to

the same period of the previous year, when we sold 77 more pumps than in this quarter.

• Director of Programs and Partnerships, John Kinaga, was invited to make a presentation on climate change

at a dinner hosted by Malawi’s Chamber of Commerce and Industry where the Minister of Agriculture was

the Chief Guest of Honor. The Minister was impressed by the particulars on the quality and performance of

MoneyMaker pumps after having had negative experiences with lower-quality treadle pumps in the past.

• Also in Malawi, radio and TV advertisements ran for one and two months, respectively. Our dealers in the

country received a minimum of 15 inquiry calls per day about MoneyMaker pumps during the period, a strong

response to the increased level of awareness from KickStart’s marketing efforts.

• In Zimbabwe, the Food and Agriculture Organization (FAO) is working through a number of NGOs and MFIs

to provide agricultural loan guarantees for small-scale farmers and more than 1,200 farmers have applied for

loans to purchase a MoneyMaker pump, which remain pending.

SOUTHERNAFRICA


ZAMBIA • MOZAMBIQUE • MALAWI • DRC • ZIMBABWE

W E S T AFRICA• KickStart’s team sold 542 pumps in West Africa during Q1.

• This represents significant 132% growth over regional sales from the same period of the previous year and

demonstrates the increased reach and operational capacity achieved in the region over the course of FY16.

The number of pumps sold, however, was lower than anticipated, falling short of the quarterly target.

• Nigeria accounted for both the largest percentage of actual sales in the region and the greatest shortfall in

anticipated sales. Devaluation of the local currency delayed a very large expected government order.

• A new Country Manager for Ghana was recruited in Q1 and brings great capacity to this high-potential

country. As the hiring process for this key position took some time, sales during the quarter were lower than

expected in the absence of a full team.

• We held a successful product launch in Ghana in August, which was attended by the Minister of Agriculture,

partners, and farmers.

GHANA• MALI • BURKINA FASO • NIGERIA • SENEGAL


BER THA’SSTORY


STARTER PUMP - In FY16, KickStart’s Product Intelligence and Development (PID) team completed the design for the newest MoneyMaker, the Starter Pump, and produced the first batch of prototypes in our Nairobi workshop. During Q1, the Field Innovations and marketing teams worked closely with PID to conduct an initial market test for the new pump in Central Kenya. The market test was designed to gauge farmers’ demand for the new product as well as price elasticity. KickStart identified three sites for the market test and offered two pricing models: in two sites, the pump and accessories were sold for $45 and, in the third, the package retailed for $35. To generate awareness, excitement, and demand for the newest addition to the MoneyMaker product line, KickStart fitted a pickup truck with a live pump demonstration, adorned it with branded banners, and stocked it with specialized collateral. Over the course of 30 days, this mobile and interactive display toured the identified test sites to introduce farmers to our lowest-cost pump offered to date, which was also available for sale on the spot. A total of 14 pumps were sold and PID provided after-sale support to monitor the performance of the pumps. KickStart plans to continue and expand on this initial market test over the course of FY17 in order to refine product challenges and more broadly introduce the starter pump by the end of the year.

INNOVATIONSHUB

Pictured below: James, a small-scale farmer in Kenya, using the Starter Pump on his plot

INNOVATIONSHUB

SOLAR PUMP - By the end of Q1, KickStart’s existing solar pump prototype had been installed on six field demo sites in Kenya. These pumps are pulling water from as deep as 56ft (17m), despite not being submersible. Of the six demo pumps, five have been paid for in full and the other was secured with a 30% deposit. Engineers from the PID team have been monitoring the performance of the pumps and addressing any technical issues encountered by the farmers using them, which have been minimal and limited to a clogged filter on one of the pumps in an area with clay-rich soil and an electrical connection issue with one other. Both issues have been solved and considerations for preventing them in the future have been incorporated into the ongoing development of our lower-cost, fully-submersible solar pump, on which KickStart is working with our partner, Encap.

FARMERS LIVING WITH HIV - KickStart’s role in the Shamba Maisha study, described under the Impact Monitoring section, below, includes providing both MoneyMaker pumps and agropreneurship training to farmers living with HIV who are in the intervention group. In August, KickStart’s Field Innovations and marketing teams began conducting these trainings and, by the end of the quarter, four groups with a minimum of 15 farmers in each were undergoing training. To support these efforts, KickStart’s teams developed instructional materials translated into the two most common local languages that are designed for farmers to be able to read on their own and continue to reference as they grow their farming businesses.


In August, KickStart’s CEO and Director of Product Intelligence and CEO traveled to Encap’s headquarters in Chicago for a design summit, during which the pump’s configuration and key performance criteria were refined. Encap has recruited three of the leading experts on motor and impeller design, the key components that will enable the team to maximize quality and efficiency while undercutting the price of existing solar-powered irrigation technologies.

Pictured below: A Solar Pump prototype

KickStart is currently leading or involved in several key studies:

• Internal evaluations on the impacts of MoneyMaker pumps are ongoing in both Malawi and Mozambique as part of KickStart’s programs in Southern Africa, supported by the IKEA Foundation. Over the past two years, baseline data was collected and follow up data collection and final analysis will be completed in FY17.

• The Busara Center for Behavioral Economics out of Princeton University remains in the process of conducting a randomized control trial (RCT) in Kenya to validate the impacts of MoneyMaker pumps. The trial has been running for over 15 months and involves 1,000 farmers supported by the NGO Child fund, 500 of whom received a MoneyMaker Hip Pump and training. The final round of data collection will take place in February 2016.

• The Shamba Maisha study led by researchers from UCSF continues to examine the impacts of MoneyMaker pumps on the health and wellbeing of farmers living with HIV. Additional qualitative findings from the completed pilot study were published during the quarter. These showed that female and male participants in the intervention described positive changes in sexual practices and gendered power dynamics as a result of the intervention, or adoption of irrigated farming with a MoneyMaker pump.Click here for more: http://bit.ly/2fzYOmE

IMPAC TMONITORING


MA JOR CHALLENGES

• The devaluation of the Naira, Nigeria’s local currency, disrupted many business activities in the country, including the sale of MoneyMaker pumps. Previously agreed upon contracts for government agencies to source from our local distributors need to be revisited and the price of MoneyMaker pumps in the country has increased as a result of this devaluation.

• Pump pricing was reviewed in Kenya and Tanzania due to low margins in the former and the Tanzanian government’s decision to start charging a VAT. The resulting adjustments will be effected next quarter.



FUNDRAISING & EX TERNAL RELATIONS

KickStart is increasingly leveraging partnerships in our development efforts as well as on the ground. In order to raise the funding and awareness needed to support both major goals of our 2021 strategy—lifting an additional 1M people out of poverty and catalyzing a significant increase in the uptake of smallholder irrigation across Africa—creative collaborations are necessary and effective.

In August, members of our team participated in World Water Week in Stockholm, Sweden. KickStart worked with the Water for Food Global Institute, CGIAR’s Research Program on Water, Land and Ecosystems (WLE), and social media start-up, Canary & Coal, to co-convene an official conference session focused on the importance of effective communication, “Telling Your Story to Make an Impact.” In line with the second goal of our 2021 plan, KickStart also organized a side meeting to bring together our partners and potential partners working in various ways to get irrigation solutions to poor small-scale farmers or researching how best to do so. This exploratory meeting was an opportunity to share successes and challenges hindering the further scale of KickStart’s and others’ work to promote small-scale irrigation in Africa.

Our team launched exciting new relationships with two new family foundations, receved a $100,000 commitment from an anonymous donor, and raised 59% more in new commitments in Q1 than the same period of the previous year.

NE W COMMITMENTS


STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) - ACCRUAL BASISFor the period ending: September 30, 2016

(000’s)

BP03-B (11-03-2016) - Sam Hartwell, Peter Juma & Guy Cogan KickStart International

(1) (2) (3) (4)

End of PreviousAssets Africa USA Total Fiscal Year

(1) Cash & equivalents $ 3 $ 659 $ 662 $ 805 (2) Accounts receivable 912 - 912 906 (3) Pledges & grants receivable 1,288 583 1,871 2,231 (4) Inventory/stocks 622 - 622 760 (5) Other current assets 184 54 238 220 (6) Total Current Assets $ 3,010 $ 1,295 $ 4,305 $ 4,922

(7) Land & Building $ 57 $ - $ 57 $ 57 (8) Machinery, Equipment & Furniture 318 7 326 324 (9) Motor Vehicles 760 - 760 746

(10) Computer Hardware & Software 553 200 753 750 (11) Total Property and Equipment 1,688 207 1,895 1,876 (12) Less Accumulated Depreciation (1,466) (201) (1,666) (1,638) (13) Net Property and Equipment $ 222 $ 6 $ 229 $ 239

(14) Long-Term Pledges Receivable 90 909 999 999 (15) Other Noncurrent Assets 41 8 49 51 (16) Deferred Tax - - - - (17) Total Non-Current Assets $ 131 $ 917 $ 1,048 $ 1,050

(18) Total Assets $ 3,363 $ 2,219 $ 5,582 $ 6,211

Liabilities and Net Assets

(19) Accounts Payable $ 536 $ 34 $ 570 $ 719 (20) Accrued Payroll & Withholdings 0 33 33 42 (21) Lines of Credit & Demand Notes - 1,899 1,899 1,450 (22) Other Current Liabilities 24 82 106 106 (23) Total Current Liabilities $ 560 $ 2,048 $ 2,608 $ 2,316

(24) Long-term debt $ - $ - $ - $ (0) (25) Less current portion of long-term debt - - - -

(26) Total Liabilities $ 560 $ 2,048 $ 2,608 $ 2,316

(27) UNA - Board Designated Reserve - 740 740 722 (28) UNA - Other 1,312 (2,668) (1,357) (1,135) (29) Total Unrestricted Net Assets (UNA) 1,312 (1,928) (617) (412) (30) Temporarily Restricted Net Assets 1,491 2,098.76 3,590 4,307 (31) Permanently Restricted Net Assets - - - - (32) Total Net Assets $ 2,803 $ 171 $ 2,973 $ 3,895

(33) Total Liabilities and Net Assets $ 3,363 $ 2,219 $ 5,582 $ 6,211

Memo: Liquidity Ratios: - - - -

(34) Debt to Working Capital Ratio (a) 1.8 1.5 (35) Current Restricted Asset Ratio (b) 1.0 0.9 (36) Unrestricted Cash Balance (c) (58) (272) (37) Unrestricted Cash Balance - Net of Reserve (d) (798) (995) (38) Days to Collect on Trade Receivables (e) 214 140 (39) Debt Service Coverage Ratio (f) (46) 12

Footnotes:57.9

(a) Caption, Line 34 - Goal is for ratio of Line of Credit ÷ (Trade Receivables + Inventory - Payables) to be less than 1.0(b) Caption, Line 35 - Goal is for ratio of (Cash + Pledges Receivable) ÷ Restricted Net Assets to be greater than 1.0(c) Caption, Line 36 - Goal is for ratio of (Cash-Restricted Net Assets-Pledges Receivable) to be greater than 0(d) Caption, Line 37 - Goal is for ratio of (Unrestricted Cash - Board Designated Reserve) to be greater than 0(e) Caption, Line 38 - Goal is for ratio of (Days in Period x Average Receivables) ÷ Product Sales to be less than 60 days(f) Caption, Line 39 - Goal is for ratio of (EBITDA - Changes in Pledges Receivable) ÷ Debt Service to be greater than 1.15

n/a

KickStart International, Inc.Statement of Financial Position (Balance Sheet) - Accrual Basis

(000's)

End of Year-to-Date Period

For the period ending: September 30, 2016

CONFIDENTIAL PREPARED 10/26/2016

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