Egyptian For Tourism Resorts · EGX:EGTS
Egyptian For Tourism Resorts — Egyptian Resorts Company (ERC) — Q3 2012 Earnings Presentation
46 slides from Egyptian For Tourism Resorts's earnings presentation, January 2013
Slide 1: Investor Presentation Q3 2012
Investor Presentation Q3 2012
Slide 2: Disclaimer
Disclaimer This presentation is intended for information purposes only and does not constitute or form part of an offer for sale or subscription or an invitation or solicitation of an offer to subscribe for or purchase securities of any kind and neither this document nor anything contained herein sh
Slide 3: Agenda
AGENDA Investment Highlights 11 ERC – Egypt’s Leading Master Developer 2 ERC – Egypt’s Leading Master Developer 3 Corporate History and Recent Events Sahl Hasheesh Main Gate 4 Sahl Hasheesh - ERC’s Mega Resort Community 5 Market Opportunity Summary 6 Appendices
Slide 4: Investment Highlights
Investment Highlights Master developer of Premium mega resort Unique business model mega resorts on the Red Sea with multiple recurring revenue streams 1 2 3 Strong management team Unique value with proven industry proposition track record for sub-developers and residents 4 5 4 Investor Presentation
Slide 5: Agenda
AGENDA 1 Investment Highlights ERC – Egypt’s Leading Master Developer 12 3 Corporate History and Recent Events Sahl Hasheesh Main Gate 4 Sahl Hasheesh - ERC’s Mega Resort Community 5 Market Opportunity Summary 6 Appendices
Slide 6: ERC – Egypt’s Master Developer
ERC – Egypt’s Master Developer ERC is a master developer and exclusive community manager of Manage the fully-integrated, world-class communities community and supply of utilities The ERC Business Model: Implement design 1 Acquire broad acre land holdings suitable for high quality development at nomi
Slide 7: ERC Business Model
ERC Business Model • By world class master planners Land Identification/ • Design and construction guidelines and Three Revenue Streams Investment Acquisition conditions + ERC leverages strong brand partnerships, a comprehensive • Water Desalination Plants and Networks development model and manageme
Slide 8: Agenda
AGENDA 1 Investment Highlights 2 ERC – Egypt’s Leading Master Developer ERC – Egypt’s Leading Master Developer Corporate History and Recent Events 3 Sahl Hasheesh Main Gate 4 Sahl Hasheesh - ERC’s Mega Resort Community 5 Market Opportunity Summary 6 Appendices
Slide 9: Shareholder Information
Shareholder Information A successful public-private partnership with a stable shareholder base Legal Structure Egyptian Public Joint Stock Company KATO Investment Listing 11.96% Free Float Egyptian Exchange (EGX) 31.91% Rowad Tourism Company Authorized Capital (EGP) 2,000,000,000 10.00% Paid‐in‐Capi
Slide 10: ERC Corporate History
ERC Corporate History 2010 ‐ 2012 onwards 2012 • New management augments existing internal structure taking company to next level in its lifecycle – key support functions included in HR plan Design 2011 • Development of community services management and utilities reticulation Construction 2010 • Thi
Slide 11: Emerging from the Crisis: Another Opportunity
Emerging from the Crisis: Another Opportunity The global financial crisis and the Jan 25 uprising have left Sahl Hasheesh with the opportunity to emerge as the destination of choice for investors Growing strategic real estate projects: Sawari marina, Old Town commercial center and Jamaran Comfortabl
Slide 12: Delayed recovery relative to peers suggests strong rebound
Delayed recovery relative to peers suggests strong rebound triggered by Phase III land plot issue resolution and/or acceleration of sales activity January 2012 – January 2013 (rebased to 100) ERC EGX30 TMGH MNHD ODHN OCDI PHDC 350 300 250 200 150 100 50 0 2‐Jan 2‐Feb 2‐Mar 2‐Apr 2‐May 2‐Jun 2‐Jul 2‐
Slide 13: Agenda
AGENDA 1 Investment Highlights 2 ERC – Egypt’s Leading Master Developer ERC – Egypt’s Leading Master Developer Sahl Hasheesh Main Gate 3 Corporate History and Recent Events Sahl Hasheesh - ERC’s Mega Resort Community 4 5 Market Opportunity Summary 6 Appendices
Slide 14: A rare and established global dive and sea-side destination
A rare and established global dive and sea-side destination Phase 1 Alexandria Cairo Hurghada Sahl Phase 3 Phase 2 Hasheesh Luxor On program to become the No. 1 destination for sea-side hospitality, residential and entertainment developers 14 Investor Presentation Q3 2012
Slide 15: A master project roughly two-thirds the size of Manhattan
A master project roughly two-thirds the size of Manhattan Sahl Hasheesh is a unique, purpose‐built Red Sea destination 18 kilometers south of Hurghada International Airport and • 18 km south of Hurghada Int’l Airport approximately 470 kilometers from Cairo. The year‐round • 22 km south of Hurghada c
Slide 16: WATG has completed the Master Plan of Phase III
WATG has completed the Master Plan of Phase III; it is now with the Tourism Development Authority for approval Phase III shapes and brings online phased districts totaling 28 million square meters, and is the key to transforming the development from a pure resort to a thriving community. The WATG de
Slide 17: Sahl Hasheesh: Progress Benchmarks
Sahl Hasheesh: Progress Benchmarks Phases I and II of Sahl Hasheesh are currently home to 2,303 hotel rooms Phase 1 5.98 million m² and suites managed by brands including Premier Le Rêve, Premier Romance, Pyramisa, and Marriott Old Palace in addition to 1,378 • Fully finished: 1,632 rooms (4 project
Slide 18: A unique value proposition for Investors & Sub-Developers
A unique value proposition for: 1. Investors & Sub-Developers Controlled Supply Large – yet strategically released – land phases based on development and ROI protection. Land supply around Hurghada is eroding quickly, while future sites at Sahl Hasheesh are easily brought online on short timelines,
Slide 19: A unique value proposition for Tourists & Residents
A unique value proposition for: 2. Tourists & Residents Community Management in an Upscale Resort Architectural integrity and cohesion guaranteed by strict design guidelines coupled with innovative design concepts promise an ideal physical environment. Community management controls and regulations e
Slide 20: ERC Business Model – The Case at Sahl Hasheesh
ERC Business Model – The Case at Sahl Hasheesh Land Identification/ Three Revenue Streams Investment Acquisition ERC leverages strong brand partnerships, a comprehensive development model and management structures that are transferable across projects and sectors – our ambition is to build a prolifi
Slide 21: Revenue Stream 1: Land Sales
Revenue Stream 1 ee Land Sales SAHL HASHEESH RED SEA, EGYPT
Slide 22: Revenue Stream 1: Land Sales
Revenue Stream 1: Land Sales Transfer of Ownership Occurs Upon Project Completion and Operation to Prevent Developer and Investor Speculation Review Offer Acceptance + CapEx Construction • Offer received from • Sales contract signed 1. Plans reviewed against • Infrastructure coordination developers/
Slide 23: Revenue Stream 1: Land Sales Industry-Beating Model
Revenue Stream 1: Land Sales Industry‐Beating Model 3.1 million m² (excluding Phase III and Sawari Marina) remain in the pipeline at Sahl Hasheesh. Average sales price grew at 89% annually before the financial crisis and profit margins reached 84%. Weighted Average Sales Price/m² Achieved (USD) Weig
Slide 24: Revenue Stream 2: Real Estate Development
Revenue Stream 2 Real Estate Development: Strategic Projects and Sahl Hasheesh Company
Slide 25: Strategic Real Estate Project – Old Town Commercial Center
1- Strategic Real Estate Project by SHC – “Old Town” Commercial Center ERC’s subsidiary Sahl Hasheesh Company (SHC) is developing approximately 725k m² of commercial and residential property The Old Town and public beach Sole developer for Phases I and II downtown Acquires plots at market prices for
Slide 26: Real Estate Projects Standard Economics
Real Estate Projects Standard Economics Commercial and residential development in Sahl Hasheesh offer highly attractive development economics • Leasing Terms: Flexible performance‐based leases Footprint designated for commercial and 115,188 m² Build‐to‐Lease entertainment space • Lease Rates: Subjec
Slide 27: Strategic Real Estate Project – The Sawari Marina
2 – Strategic Real Estate Project by ERC – The Sawari Marina The Red Sea’s premier Marina and the crown jewel of Sahl Hasheesh • 2.5 million m2 exclusive community centered around a world‐class yacht club and marina. • Water surface area of 117,000 m2 to host 330+ boats and yachts from 10‐to‐60 mete
Slide 28: Sawari Marina: Robust Demand for Luxury Developments
2 – Strategic Real Estate Project by ERC – The Sawari Marina Robust Demand for Luxury Developments ERC’s pre‐launch sales event in late 2010 a great success: Sales of luxury villas and condominiums significantly outpaced ERC’s best‐case‐scenario projections, underscoring the strength of demand for E
Slide 29: Strategic Real Estate Project – The Sawari Marina
2 – Strategic Real Estate Project by ERC – The Sawari Marina 29 Investor Presentation Q3 2012
Slide 30: Strategic Real Estate Project – Jamaran Villas
3 – Strategic Real Estate Project by ERC – Jamaran Villas Jamaran: An exclusive enclave of sea-side villas along the coast of Sahl Hasheesh • All Jamaran villas afford open views of the Red Sea’s shimmering waters. • Spans a total area of 320,000 m2. • 47 two‐storey villas: four designs with total f
Slide 31: Jamaran Villas Project Highlights
3 – Strategic Real Estate Project by ERC – Jamaran Villas Jamaran will be connected to Old Town by a boardwalk, and within Jamaran itself, a range of amenities are planned. These include a network of parks spread out amongst the villas, a private club house featuring a spa, dining area and gym, and
Slide 32: Jamaran Villas Designs
3 – Strategic Real Estate Project by ERC – Jamaran Villas The Arabesque design The Mediterranean design View from a completed villa in Jamaran 32 Investor Presentation Q3 2012
Slide 33: Revenue Stream 3: Utilities and Community Management
Revenue Stream 3 Utilities and Community Management
Slide 34: Revenue Stream 3: Utilities and Community Management
Revenue Stream 3: Utilities and Community Management ERC’s extensive infrastructure investments position it as the exclusive utilities and services provider – a model that generates sustainable cash flows 1 cost recovery and 3 profit centers from recurring revenues Supply of Community Water Electric
Slide 35: Agenda
AGENDA 1 Investment Highlights 2 ERC – Egypt’s Leading Master Developer ERC – Egypt’s Leading Master Developer 3 Corporate History and Recent Events Sahl Hasheesh Main Gate 4 Sahl Hasheesh - ERC’s Mega Resort Community Market Opportunity Summary 5 6 Appendices
Slide 36: High stock liquidity with high growth potential
High stock liquidity with high growth potential… 180 ERC EGX30 Shares Outstanding 1,050,000,000 160 Share Price* EGP 1.03 140 Market Cap. (EGP)* 1,155,000,000 120 100 Average Daily Volume** 4,331,983 80 9M‐2012 60 Revenue EGP 20.2 million 40 20 EBT EGP (19.6) million 0 EBT Margin ‐95.6 % Jan‐12 Feb‐
Slide 37: Backed by a solid balance sheet
… backed by a solid balance sheet Consolidated Liquid Assets and Liabilities (EGP Millions) 509.4 534.2 443.5 331.9 384.2 216.4 412.8 218.4 197.1 192.1 208.1 364.8 462.3 371.2 56.1 10.4 309.2 273.8 260.0 280.8 233.6 248.1 238.6 200.0 136.5 168.9 76.0 111.6 2006 2007 2008 2009 2010 2011 Q3 2012 Cash
Slide 38: Agenda
AGENDA 1 Investment Highlights 2 ERC – Egypt’s Leading Master Developer ERC – Egypt’s Leading Master Developer 3 Corporate History and Recent Events Sahl Hasheesh Main Gate 4 Sahl Hasheesh - ERC’s Mega Resort Community 5 Market Opportunity Summary Appendices 6
Slide 39: Tourism Sector
Tourism Sector Highly strategic for sustainable economic growth aided by positive publicity Breakdown of Arrivals by Region of Origin | 2012 North America Asia Pacific 3.7% 4.2% • 11.5 million tourists visited Egypt in 2012 down from 14.7 million in 2010 Africa • Reduced room rates facilitating curr
Slide 40: Tourism in Egypt and the Egyptian Red Sea
Tourism Sector Resilience, returning tourists and continued investment highlight sector Egyptian Tourist Arrivals to Egypt | Millions Revolution Overnight Stays in Hotels by Tourists (millions) Sharm El Sheikh 14.7 attacks 14.1 EGP 12.8 Devaluation 11.7 13.1 12.3 12 11.5 11.1 9/11 9.8 9.1 8.6 8.1 6
Slide 41: ERC’s Vision, Mission & Strategy
ERC’s Vision, Mission & Strategy VISION MISSION STRATEGY To become a regional Master Developer To make our shareholders proud of the To successfully implement the identified of International Standard Mega company’s standards, reputation, initiatives to ensure the success of our Communities by design
Slide 42: Management Team (1/2)
Management Team (1/2) Dr. Samir Makary, Chairman Dr. Makary replaces Mahmoud Abdallah, who stepped down from the Board in support of a national corporate governance policy that will soon prevent a chairman of a government holding company from chairing any other company. Dr. Makary has over 20 years
Slide 43: Management Team (2/2)
Management Team (2/2) Darren Gibson, Vice President ‐ Planning & Development Mr. Gibson comes to ERC with over 20 years of experience in public and private sector urban planning, including eight years as a Company Director in town planning and development consultancy practices. He has extensive expe
Slide 44: Select Consolidated Financials
Select Consolidated Financials From the Income Statement (EGP 000,000’s) 2008 2009 2010 2011 9M‐2012 Revenue 347.8 25.8 14.9 28.2 20.5 Gross Profit 324.0 12.1 (5.8) (1) (17.9) EBT 345.9 3.9 (7.8) (3.2) (19.6) Net Income 265.8 4.7 (9.4) (7.4) (20.2) From the Balance Sheet (EGP 000,000’s) 2008 2009 20
Slide 45: Sahl Hasheesh photos
The downtown commercial The Marina of Sahl Hasheesh, In‐house development of sea‐ area and public beach of Sahl under development in front residential villas with Hasheesh. Developed by Sahl partnership with Orascom exquisite open water views and Hasheesh Co., the subsidiary of Development and large
Slide 46: www.erc-egypt.com
www.erc‐egypt.com www.sahlhasheesh.com
Egyptian Resorts Company (ERC) — Q3 2012 Earnings Presentation on 6ix