Slide 1: Investor Presentation Full Year 2023 Financial Results
Classification: Confidential INVESTOR PRESENTATION FULL YEAR 2023 FINANCIAL RESULTS FEBRUARY 2024
Slide 2: Disclaimer
Classification: Confidential FEBRUARY 2024 DISCLAIMER The information contained herein has been prepared by TECOM Group PJSC (“TECOM”) or (the “Company”). The information contained in this presentation may not have been reviewed or reported on by the Company’s auditors. The company relies on informa
Slide 3: TECOM Group Management Presenting
Classification: Confidential FEBRUARY 2024 TECOM GROUP MANAGEMENT PRESENTING ABDULLA BELHOUL MICHAEL WUNDERBALDINGER CEO OF TECOM GROUP CFO OF TECOM GROUP 3 03
Slide 4: Content
Classification: Confidential FEBRUARY 2024 CONTENT MACROECONOMIC AND REAL ESTATE MARKET HIGHLIGHTS 5-8 TECOM GROUP’S VALUE PROPOSITION 9-13 FULL YEAR 2023 OPERATIONAL & FINANCIAL PERFORMANCE HIGHLIGHTS 14-25 NEW DEVELOPMENT UPDATE 26-27 BUSINESS SEGMENTS PERFORMANCE 28-32 SUSTAINABILITY AND ESG 33-3
Slide 5: Macroeconomic and Real Estate Market Highlights
Classification: Confidential MACROECONOMIC AND REAL ESTATE MARKET HIGHLIGHTS
Slide 6: Dubai's Economy Poised for Strong Growth in 2024
Classification: Confidential FEBRUARY 2024 DUBAI’S ECONOMY POISED FOR STRONG GROWTH IN 2024, UNDERPINNED BY NON-OIL GROWTH, SUPPORTED BY “D33” DUBAI’S ECONOMY EXPANDED AT A STEADY PACE IN 2023 … WITH STRONG GROWTH & CONTRIBUTION FROM KEY • Dubai’s economy registered a 3.3% YoY growth in first 9M of
Slide 7: Private Sector Growth Driving Demand for Dubai Office Spaces
Classification: Confidential FEBRUARY 2024 HEALTHY MACROECONOMIC BACKDROP, PRIVATE SECTOR GROWTH DRIVING DEMAND FOR DUBAI OFFICE SPACES ROBUST DEMAND FOR COMMERCIAL REAL ESTATE DUBAI OFFICES AVERAGE OCCUPANCY RATES (%)** LIFTS OCCUPANCY RATES • Grade A office space vacancies within CBD are only 8%,
Slide 8: Strong Growth in Transportation & Storage Drives Warehousing Demand
Classification: Confidential FEBRUARY 2024 STRONG GROWTH IN TRANSPORTATION & STORAGE SECTOR DRIVES DEMAND FOR WAREHOUSING SPACES DEMAND FOR WAREHOUSES IS SURGING WHILE SUPPLY TECOM HOUSE VIEW REMAINS CONSTRAINED • Increase in economic activity requiring storage spaces and solutions - • We continue t
Slide 9: TECOM Group's Value Proposition
Classification: Confidential TECOM GROUP’S VALUE PROPOSITION
Slide 10: A Compelling Investment Opportunity
Classification: Confidential FEBRUARY 2024 A COMPELLING INVESTMENT OPPORTUNITY Over 20 years 11,000+ Dividend payout 6 strategic sectors Of experience as Leading player long-term, loyal and Supported by robust and primed for sustainable in Dubai’s business hub diversified customer base attractive fi
Slide 11: 10 Business Districts Strategically Located
Classification: Confidential FEBRUARY 2024 Dubai’s strategic business enabler 10 BUSINESS DISTRICTS and creator of world’s class business districts STRATEGICALLY LOCATED 11 12
Slide 12: Delivering Value Through Our Business Segments
Classification: Confidential FEBRUARY 2024 DELIVERING VALUE THROUGH OUR 4 BUSINESS SEGMENTS COMMERCIAL INDUSTRIAL LAND SERVICES LEASING LEASING LEASING & OTHERS • Government services • Registration and licensing 9.5 11.5 • Corporate services 164 Incubation services Million sqft Million sqft Million
Slide 13: Unlocking Sustainable Growth Through Clearly Defined Objectives
Classification: Confidential FEBRUARY 2024 UNLOCKING SUSTAINABLE GROWTH THROUGH CLEARLY DEFINED OBJECTIVES STRATEGIC PILLARS OPTIMISE CORE BUSINESS DEVELOP BUILD NEW SOURCES & PERFORMANCE DIFFERENTIATED OF GROWTH VALUE PROPOSITION - Retain and strengthen relationships with customers - Deliver a comp
Slide 14: Full Year 2023 Operational & Financial Performance Highlights
Classification: Confidential FULL YEAR 2023 OPERATIONAL & FINANCIAL PERFORMANCE HIGHLIGHTS
Slide 15: FY 2023 Key Highlights
Classification: Confidential FEBRUARY 2024 FY 2023 KEY HIGHLIGHTS STRONG PROFITABILITY GROWTH SUPPORTED BY RECORD REVENUE AS WE LEVERAGED OUR MARKET LEADERSHIP POSITION, REPUTATION, AND QUALITY PORTFOLIO TO CAPTURE DEMAND-INDUCED MARKET GROWTH Record revenue High occupancy rate of 89% c. 1,500 new c
Slide 16: Financial Highlights (Full Year 2023)
Classification: Confidential FEBRUARY 2024 FINANCIAL HIGHLIGHTS (FULL YEAR 2023) OPERATING PERFORMANCE 89% Consolidated Occupancy (Excluding Land Leasing) 2.4 Years REVENUE EBITDA FFO1 Overall blended WALT* (Weighted of Commercial AED 2,169 MN AED 1,654 MN AED 1,447 MN [BTS & BTL] and Industrial) vs
Slide 17: Financial Highlights (Quarterly 2023)
Classification: Confidential FEBRUARY 2024 FINANCIAL HIGHLIGHTS (QUARTERLY 2023) 2023 Q1 Q2 Q3 Q4 REVENUE AED 514 MN AED 535 MN AED 541 MN AED 579 MN vs. 2022 6% 6% 10% 17% EBITDA AED 399 MN AED 426 MN AED 410 MN AED 419 MN vs. 2022 14% 14% 13% 61% EBITDA MARGIN 78% 80% 76% 72% vs. 2022 6% 6% 1% 20%
Slide 18: Healthy Cash Flow Generation & Increase in Free Cash Flow
Classification: Confidential FEBRUARY 2024 HEALTHY CASH FLOW GENERATION & INCREASE IN FREE CASH FLOW o FFO performance has been vigorous, with a noteworthy 21% growth, underscoring the Group’s strong cash generation from core operations FUNDS FROM OPERATIONS (FFO)1 o The Group’s recurring free cash
Slide 19: Balance Sheet
Classification: Confidential FEBRUARY 2024 BALANCE SHEET 31 DEC 31 DEC YoY DESCRIPTION 2023 2022 CHANGE % PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS 114 116 -2% INVESTMENT PROPERTY 11,865 11,874 0% DERIVATIVE FINANCIAL INSTRUMENTS 222 316 -30% TRADE, UNBILLED AND FINANCE LEASE RECEIVABLES 816 743 10%
Slide 20: Income Statement
Classification: Confidential FEBRUARY 2024 INCOME STATEMENT 31 DEC 31 DEC YoY DESCRIPTION 2023 2022 CHANGE % REVENUE 2,169 1,973 10% DIRECT COSTS (760) (768) -1% GROSS PROFIT 1,409 1,206 17% OTHER OPERATING INCOME 47 42 12% 1,456 1,248 17% GENERAL AND ADMINISTRATIVE (154) (245) -37% MARKETING AND SE
Slide 21: Growth Strategy Supported by Healthy Leverage Standing
Classification: Confidential FEBRUARY 2024 GROWTH STRATEGY SUPPORTED BY HEALTHY LEVERAGE STANDING CAPITAL STRUCTURE o Ended the year with an BALANCE SHEET AED MN AMOUNT LTV1 NET DEBT / LTM2 EBITDA optimised financial position, DEBT 4,352 AED 7.6BN CORPORATE FACILITY 4,352 supporting our day-to-day C
Slide 22: Portfolio Valuation
Classification: Confidential FEBRUARY 2024 PORTFOLIO VALUATION Strong appreciation in portfolio value driven by robust economic growth, increase in Dubai’s commercial property prices and rental income, high occupancy rates across our assets OUR PORTFOLIO 165MN 1,128 WAREHOUSES SQ. FT. LAND AREA 147
Slide 23: EPRA KPIs
Classification: Confidential FEBRUARY 2024 EPRA KPIs Q3 Q2 Q1 KPI 2023 2022 2021 2020 2019 2023 2023 2023 IFRS EARNINGS (AED Million) 1,078 768 485 255 726 569 579 634 EPRA EARNINGS (AED Million) 1,502 1,096 721 348 1,024 898 944 984 IFRS NET ASSETS (AED Million) 6,329 6,141 6,256 5,981 5,968 5,613
Slide 24: Analyst Coverage Report
Classification: Confidential FEBRUARY 2024 ANALYST COVERAGE REPORT DATE 3rd NOV 2023 31st OCT 2023 1st NOV 2023 9th NOV 2023 25th SEP 2023 19th OCT 2023 14th DEC 2023 30th DEC 2023 RATING BUY BUY BUY EQUAL-WEIGHT BUY OVER-WEIGHT BUY BUY ANALYST HARSH MEHTA NIDA IQBAL CHARLES BOISSIER NIKHIL MIRSHA I
Slide 25: Dividend Policy
Classification: Confidential FEBRUARY 2024 DIVIDEND POLICY • In June 2022 we announced our dividend policy: • Semi-annual dividend pay-outs adding to AED 800 million FY 2023 FY 2024 H1 2025 per annum were committed. • AED 400 million dividend paid for second half of 2022 in two payments of AED 200 m
Slide 26: New Development Update
Classification: Confidential NEW DEVELOPMENT UPDATE
Slide 27: New Development Update
Classification: Confidential FEBRUARY 2024 NEW DEVELOPMENT UPDATE PROJECT RATIONALE DEVELOPMENT – DUBAI SCIENCE PARK (DSP) • Existing warehouses in DSP are operating at PROJECT KEY HIGHLIGHTS PROJECT LOCATION full occupancy (100% as of Jun 2023) over the last few years • DSP’s location is PLOT AREA
Slide 28: Business Segments Performance
Classification: Confidential BUSINESS SEGMENTS PERFORMANCE
Slide 29: Commercial Leasing Segment
Classification: Confidential FEBRUARY 2024 COMMERCIAL LEASING SEGMENT STELLAR PERFORMANCE DRIVEN BY EXCEPTIONAL DEMAND, LEADING TO VERY HIGH OCCUPANCY RATES, NOTABLY FOR GRADE A OFFICES IN CBD DESCRIPTION FULL YEAR % CHANGE Revenue growth driven by: 2023 2022 YOY • Higher occupancy due to demand for
Slide 30: Industrial Leasing Segment
Classification: Confidential FEBRUARY 2024 INDUSTRIAL LEASING SEGMENT OUTSTANDING PERFORMANCE DRIVEN BY STRONG DEMAND FOR STORAGE & LOGISTICS SPACE AND WORKER ACCOMMODATION, UNDERPINNED BY INCREASED ACTIVITY IN SECTORS REQUIRING THOSE SOLUTIONS INCLUDING MANUFACTURING, TRADE AND CONSTRUCTION FULL YE
Slide 31: Land Leasing Segment
Classification: Confidential FEBRUARY 2024 LAND LEASING SEGMENT EXCEPTIONAL PERFORMANCE DRIVEN BY INCREASE IN OCCUPANCY AS ECONOMIC CONDITIONS CONTINUED TO IMPROVE, DRIVING DEMAND FOR BOTH INDUSTRIAL AND COMMERCIAL LAND FULL YEAR % CHANGE DESCRIPTION 2023 2022 YOY • Economic trends in the region hav
Slide 32: Services & Others Segment
Classification: Confidential FEBRUARY 2024 SERVICES & OTHERS SEGMENT DOUBLE DIGIT GROWTH UNDERPINNED BY STRONG DEMAND FROM FREELANCERS, INCREASE IN NUMBER OF TRANSACTIONS (“AXS”) DRIVEN BY AN INCREASE IN THE NUMBER OF CUSTOMERS AND THEIR RESPECTIVE EMPLOYEES DESCRIPTION FULL YEAR % CHANGE • This gro
Slide 33: Sustainability and ESG
Classification: Confidential SUSTAINABILITY AND ESG
Slide 34: Environment & Sustainability Goals
Classification: Confidential FEBRUARY 2024 ENVIRONMENT & SUSTAINABILITY GOALS National/International OUR CORE PILLARS Mandates • Ethical business policies & practices Governance and • Robust governance UAE Centennial 2071 Stabilise core Risk • Prudent risk management business • Responsible sourcing
Slide 35: Key ESG Highlights and Achievements of Year 2023
Classification: Confidential FEBRUARY 2024 KEY ESG HIGHLIGHTS AND ACHIEVEMENTS OF YEAR 2023 Economy 380 87.4% AED 1.1BN Active Start-ups (9.83% up from 2022) Customer Experience (CX) Index, adopted in Net profit for FY2023 2023. Previously we measured Customer (+49% increase compared to same Includi
Slide 36: Key ESG Highlights and Achievements of Year 2023 - Cont'd
Classification: Confidential FEBRUARY 2024 KEY ESG HIGHLIGHTS AND ACHIEVEMENTS OF YEAR 2023 - CONT’D People 4,200 hrs. 24% 1/3 of training delivered to our employees, averaging 0 Work-related injuries or Emiratisation Rate of our employees fatalities since 2019 15.27 hrs. are female per employee Env
Slide 37: Key ESG Highlights and Achievements of Year 2023 - Cont'd
Classification: Confidential FEBRUARY 2024 KEY ESG HIGHLIGHTS AND ACHIEVEMENTS OF YEAR 2023 - CONT’D As the UAE took the global stage by hosting COP28, TECOM Group was deeply engaged in supporting and advancing sustainability awareness initiatives across our districts and through collaborations with
Slide 38: Achievements and Outlook
Classification: Confidential ACHIEVEMENTS AND OUTLOOK
Slide 39: Achievements FY2023
Classification: Confidential FEBRUARY 2024 ACHIEVEMENTS FY2023 REVENUE EBITDA EBITDA NET PROFIT FFO OCCUPANCY MARGIN End of Period ~85% COMMERCIAL LEASING TARGETS AED 1,900 MN AED 1,266 MN 66% AED 558 MN AED 969 MN (IPO FINANCIAL GUIDANCE) ~80% INDUSTRIAL LEASING 89% COMMERCIAL LEASING AED 2,169 MN
Slide 40: Priorities for 2024 & Beyond
Classification: Confidential FEBRUARY 2024 PRIORITIES FOR 2024 & BEYOND OPTIMISE CORE BUSINESS DEVELOP DIFFERENTIATED BUILD NEW SOURCES & PERFORMANCE VALUE PROPOSITION OF GROWTH Identify customer priorities and Enhance and integrate customer Identify novel, differentiated retention initiatives journ
Slide 41: Growth Drivers
Classification: Confidential FEBRUARY 2024 GROWTH DRIVERS 01. 02. 03. 04. 05. Occupancy Rental Completed Growth Complementary Rates Rates Projects Projects Services Occupancy rates Rental rates growth Delivery of high- Future organic Growth driven by growth driven by as Dubai office rental quality b
Slide 42: Contact Us
Classification: Confidential FEBRUARY 2024 CONTACT US
Slide 43: Thank You
Classification: Confidential THANK YOU