Emaar Properties (p.j.s.c) · DFM:EMAAR
Emaar Properties (p.j.s.c) — Emaar Properties — H1 2020 Earnings Presentation
62 slides from Emaar Properties (p.j.s.c)'s earnings presentation, September 2020
Slide 1: Prepared for the Future
Prepared for the Future Built on Strength, Prudence & Resilience. Investor Presentation September 2020 0 | EMAAR PROPERTIES
Slide 2: Disclaimer
Disclaimer Emaar Properties PJSC, for themselves and for Emaar Group, give notice that: The particulars of this presentation do not constitute any part of an offer or a contract. Given that the presentation contains information based on forecasts and roll outs, all statements contained in this prese
Slide 3: Discussion Summary
Discussion Summary Investing In Emaar Expanding Footprint in UAE & International Markets Business Strategy & Outlook Q2 & H1 2020 Results Update Annexure 2 | EMAAR PROPERTIES
Slide 4: Investing In Emaar
Investing In Emaar 3 | EMAAR PROPERTIES
Slide 5: Emaar Purpose & Business Model
Emaar Purpose & Business Model An Enduring Enterprise Our Business Model: driven by: We operate a business model that puts risk mitigation at the centre of our core strategies. We create value by providing high quality and highly desirable environments, • Vision to redefine engineering which help ou
Slide 6: A Globally Admired Real Estate Company
A Globally Admired Real Estate Company Creator of World-Renowned Architectures Landmark Hospitality Assets Burj Khalifa – Tallest Building in the World 23 Hotels with c. 5,264 keys Dubai Mall – Most Visited Mall in the World (Owner) Established brands: Address Hotels & Resorts, Vida Hotels & Resorts
Slide 7: Diversified Real Estate Play In UAE & International Markets
Diversified Real Estate Play In UAE & International Markets Resilient Business Model With Strong Growth Potential Total Revenues In AED Mn 16% 25,694 ✓ Consistent growth delivered in difficult market 24,586 environment post 2014 oil price crash 18,752 15,540 15,411 12,937 ✓ Good business mix with st
Slide 8: Strong Balance Sheet
Strong Balance Sheet Solid Credit Profile with very Comfortable Net Debt-to-Equity and Significant Debt Coverage AED Million H1 2020 Comfortable Debt Maturity Profile – Jun 2020 Debt 27,142 1 Cash 11,866 Net Debt 15,276 8,865 Equity 64,866 Total Assets 122,553 5,131 4,820 3,839 2 2,378 2,141 Key Rat
Slide 9: Emaar In “The Value Zone”
Emaar In “The Value Zone” Emaar Properties is Trading at Significant Discount to its NAV despite Superior Financial Metrics 57% -46% Market Cap (AED Bn) -61% 2019 Implied Cap Rate 1 52.0 Premium / (Discount) to BV Emaar Malls 11.4% -79% 21.7 US Peers 4.8% Premium / (Discount) to NAV* 6.0% EU Peers E
Slide 10: Sum of The Parts valuation analysis
Sum of The Parts valuation analysis Emaar’s market cap 1 Emaar’s share of Listed companies > AED 22 Bn AED 30 Bn 30 8 Current share prices implies deep holding company 30 discount and 17 negative valuation given to Emaar’s -8 unlisted 2 businesses 3 0 Emaar Emaar Dev. Emaar Malls Emaar MISR EEC Amla
Slide 11: Expanding Footprint in UAE & International Markets
Expanding Footprint in UAE & International Markets 10 | EMAAR PROPERTIES
Slide 12: Developer of Iconic Master Plans Transforming Dubai
Developer of Iconic Master Plans Transforming Dubai… Downtown Dubai Dubai Marina 2005 Today 2003 Today ✓ 500-acre Flagship Mega-Development ✓ Largest Man-Made Marina1 (3.5 sq.km.) development of ✓ One of the Most Visited Destinations In The World its kind ✓ Includes World’s Tallest Building & World’
Slide 13: Having Stood Multiple Tests of Time
…Having Stood Multiple Tests of Time Emaar’s Unique Proposition of Integrated Masterplans and Superior Quality helped to Deliver Consistent Performance in UAE Emaar’s Sales – Ahead of the Competition (~5x in 2019) In AED Bn 18.0 ✓ Displayed strong sales traction, despite 14.4 14.4 14.9 difficult mar
Slide 14: Renowned For Its Iconic Retail Assets
Renowned For Its Iconic Retail Assets… The Dubai Mall – Most Visited Mall in the World ✓ World renowned shopping & entertainment destination ✓ 4.2 Mn sq. ft. GLA (incl. Fashion Avenue Expansion) ✓ 96% Occupancy1 ✓ 1,200+ stores with leading retailers and marquee global brands ✓ 84 Mn Footfalls in 20
Slide 15: Delivering Robust Growth
…Delivering Robust Growth Emaar Malls Delivered Consistent Growth over 2012 to 2019 Robust Growth in Footfalls… 6,095 5,969 5,158 5,295 5,371 5,423 5,419 5,368 ✓ Preferred gateway to Dubai’s consumerism for aspiring retailers and brands 6% 114 124 125 130 136 136 104 ✓ Urban lifestyle destination an
Slide 16: And Consistently Outperforming the Market
…And Consistently Outperforming the Market Emaar Malls Outperformed Dubai Retail Market over 2018-2019 Super Regional Malls Regional Malls Specialty Retail & Community Centres Rent per sq. ft.: 2-Yr CAGR Rent per sq. ft.: 2-Yr CAGR Rent per sq. ft.: 2-Yr CAGR 1% -4% -9% -18% -15% 2019 -14% 2019 2019
Slide 17: Complemented By Immersive Entertainment Avenues
…Complemented By Immersive Entertainment Avenues Entertainment Business: Major Tourist Attractions driving Footfalls at The Dubai Mall Robust Growth & Superior Margins In AED Mn ✓ At The Top, world’s highest observation desk 66.6% 67.7% 68.6% 62.6% 58.7% 58.9% 59.4% ✓ Dubai Aquarium & Underwater Zoo
Slide 18: Hospitality Assets Deliver Steady Performance
Hospitality Assets Deliver Steady Performance Steady Performance in a Difficult Market Environment Emaar Hotels: Hospitality Business: Resilient & Profitable In AED Mn ✓ Able to maintain healthy EBITDA margin in a weak market with operating costs under control 37.9% ✓ Hospitality sector will be the
Slide 19: Replicating Our Success In International Markets
Replicating Our Success In International Markets Leverage Emaar’s Strength And Unlock the Land Bank Potential in Key International Markets Development Retail Entertainment Hospitality ✓ c. 39,300 units sold & c. 22,500 units ✓ Own & operate iconic ✓ Launch entertainment ✓ Adopt an asset-light delive
Slide 20: Business Strategy & Outlook
Business Strategy & Outlook 19 | EMAAR PROPERTIES
Slide 21: Top Priorities
Top 3 Priorities Maintain Leadership Position in Our Markets Focus on Execution & Cash Flow Generation Focus on Maximising Shareholder Returns 20 | EMAAR PROPERTIES
Slide 22: UAE Development Strategy: Consolidate and Prepare for the Next Growth Phase
UAE Development Strategy: Consolidate and Prepare for the Next Growth Phase Leverage the Strength Marketing to Well-planned Execution Product Innovations of Master Developments International Customers & Delivery • Leverage on the existing • Unique product offering for • Targeting international • Tim
Slide 23: UAE Retail Strategy: Multi-format Omni-channel Growth Strategy
UAE Retail Strategy: Multi-format Omni-channel Growth Strategy Leverage Superior Asset Mix Robust Retail Space Growth • Offer diverse retailing experience - super-regional malls, • Well-planned extensions at The Dubai Mall to enhance regional malls, specialty retail, community retail centers custome
Slide 24: UAE Retail Strategy: Adopt Low-Risk Model For Future Expansions
UAE Retail Strategy: Adopt Low-Risk Model For Future Expansions Projects under Emaar Malls Operate As Pure Rental Income Play GLA Expected Project Name • Pure Rental Income Play (‘000 sq.ft.) Opening • Focus on rental income growth and cash flow generation Meadows Village c. 95 H2 2020 • Minimal Dev
Slide 25: Q2 & H1 2020 Results Update
Q2 & H1 2020 Results Update 24 | EMAAR PROPERTIES
Slide 26: H1 2020 Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development H1 2020 Key Highlights Property Sales Revenues EBITDA in UAE at AED 3.2 Bn AED 9.0 Bn AED 4.4 Bn Net Profit 27% Recurring Revenues Emaar Malls Achieved AED 2.0 Bn 74% Recurring EBITDA1 ~39 Mn Footfalls Succe
Slide 27: Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Key Highlights AED Million Q2 2020 Q2 2019 % Change H1 2020 H1 2019 % Change Group Property Sales 1,233 4,379 (72%) 5,120 11,252 (54%) Revenue 3,205 5,675 (44%) 9,032 11,569 (22%) Gross Profit 1,187 2,713 (5
Slide 28: Segment Analysis
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Segment Analysis Segment Wise Revenues (AED Mn) Revenue Share % EBITDA Share % -22% 11,569 5% 706 4% 23% 678 18% 9,032 AED 2,161 383 AED 3% 441 9,032 Mn 50% 4,365 Mn - 46% 54% 1,587 1,742 15% - 35% 19% 4% 1,
Slide 29: Historical Trend
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Historical Trend In AED Mn Revenues Gross Profit CAGR 16% CAGR 12% 12,883 25,694 24,586 11,562 18,572 9,374 8,100 15,540 7,263 13,661 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 EBITDA Net Profit After
Slide 30: Balance Sheet & Cash Flow Overview
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Balance Sheet & Cash Flow Overview Balance Sheet Overview Cash Flow Overview In AED Mn Total: AED 122,553 Mn Bank Balances & Cash 6% 16% Trade & Other Payables 990 5,158 5,061 Trade & Other 23 22% Receivable
Slide 31: Emaar Development – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Development – Key Highlights 1 AED Million H1 2020 H1 2019 % Change Property Sales 3,230 9,350 (65%) Revenue 4,818 6,237 (23%) Gross Profit 1,787 2,576 (31%) Margin (%) 37.1% 41.3% EBITDA 1,270 1,949 (
Slide 32: UAE Development – Current Project Status
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development UAE Development – Current Project Status 100% Owned Developments 100% Consolidated JV JV/JDAs with 50% Share Others Ras Al Khaimah (100% owned land Downtown Arabian Dubai Emaar Dubai Mina Dubai Emaar Dubai 5
Slide 33: Emaar Development – Historical Trend
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Development – Historical Trend In AED Mn Revenues Gross Profit CAGR 25% CAGR 21% 6,833 15,411 12,746 5,061 8,863 3,761 6,899 2,861 5,253 2,395 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 EBITDA N
Slide 34: International Development – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development International Development – Key Highlights International Sales – Units Released c. AED 12.2 Bn Revenue Backlog 1 c. AED 1.9 Bn Sales Booked To be recognized over in H1 2020 94% 6% 14,682 next 3-4 years 86% 1
Slide 35: International Development – Key Highlights (Emaar Misr)
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development International Development – Key Highlights Emaar Misr – Development 1 Key Highlights AED Mn EGP Mn • Delivered 162 units in H1 2020. H1 2020 H1 2019 % Change H1 2020 H1 2019 % Change • Property sales grew by
Slide 36: Emaar Malls – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Malls – Key Highlights1 Excl. Namshi AED Million H1 2020 H1 2019 % Change AED Million H1 2020 H1 2019 % Change Revenue 1,587 2,161 (27%) GLA (Mn sq. ft.) 6.7 6.6 0% Gross Profit 955 1,717 (44%) Occupan
Slide 37: Emaar Malls (Excl. Namshi) – Historical Trend
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Malls (Excl. Namshi) – Historical Trend In AED Mn Rental Income EBITDA CAGR 5% CAGR 7% 3,599 3,647 3,227 3,323 2,934 2,952 2,992 2,676 2,447 2,250 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Net
Slide 38: Namshi – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Namshi – Key Highlights Namshi Revenues 1 (AED Mn) Namshi Key Statistics 2 CAGR 24% Net Merchandise Gross Profit Value 1,028 + 11% + 59% 849 730 Active Customers Online Traffic 555 + 22% + 29% 440 Social Med
Slide 39: Emaar Hospitality – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Hospitality – Key Highlights AED Mn H1 2020 H1 2019 3 % Change H1 2020 Revenue Breakup Occupancy Rate (%)* 48% 72% RevPar (AED)* 292 529 (45%) 29% Room Revenue Room Revenue 156 282 (45%) 41% F&B Revenu
Slide 40: Emaar Hospitality – Asset Performance
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Hospitality – Asset Performance 1 1 Address Boulevard The Palace Downtown Address Dubai Mall Address Downtown H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 Available Room Nights 17,83
Slide 41: Annexure
Annexure 40 | EMAAR PROPERTIES
Slide 42: Emaar Group – Divisions Overview
Emaar Group – Divisions Overview UAE Entertainment & International Operations Emaar Malls Emaar Hospitality Development Leasing • Leading master plan • Active in 10 targeted high • Emaar Malls PJSC is • Hotel owner and operator • Provider of premium developer in Dubai growth countries listed on DFM
Slide 43: UAE Development – Projects Overview
UAE Development – Projects Overview Wholly-owned projects Downtown Dubai Arabian Ranches Dubai Marina Emirates Living Emaar Beachfront* The Valley Garden All under-construction Expansion of the Two waterfront Green-focused An exclusive residential A gated community projects (including current Arabia
Slide 44: UAE Development – Projects Overview
UAE Development – Projects Overview 100% Consolidated JV JVs/JDAs with 50% share Dubai Hills Estate Mina Rashid Dubai Creek Harbour Emaar South Zabeel Square Joint Venture between Emaar Joint Venture between Emaar Joint Development Agreement Joint Venture between Emaar Joint venture between Emaar an
Slide 45: UAE Development – Projects Under Development
UAE Development – Projects Under Development % Remaining Collections of Sold Value Project Value Area Launch % Collected of % Completion % Gross Margin Till Post Project (100% Owned) Units % Unit Sold % Value Sold Total (AED Mn)(1) (SQF) Period sold value Jun-20 Jun-20(2) Handover Handover Downtown
Slide 46: UAE Development – Projects Under Development
UAE Development – Projects Under Development % Remaining Collections of Sold Value Project Value Area Launch % Collected of % Completion % Gross Margin Till Post Project (Joint Ventures) Units % Unit Sold % Value Sold Total (AED Mn)(1) (SQF) Period sold value Jun-20 Jun-20(2) Handover Handover Dubai
Slide 47: UAE Development – Projects Under Development
UAE Development – Projects Under Development % Remaining Collections of Sold Value Project Value Area Launch % Collected of % Completion % Gross Margin Till Post Project (Joint Ventures) Units % Unit Sold % Value Sold Total (AED Mn)(1) (SQF) Period sold value Jun-20 Jun-20(2) Handover Handover Dubai
Slide 48: UAE Development – Completed Projects
UAE Development – Completed Projects1 Project Value Area % Collected of sold % Remaining Collections Project (100% Owned) Units % Unit Sold % Value Sold (AED Mn)(2) (SQF) value of Sold Value Downtown Dubai 4,592 18,633 6,837,110 98% 96% 95% 5% Address Sky View 552 2,890 988,344 100% 100% 90% 10% Blv
Slide 49: UAE Development – Completed Projects
UAE Development – Completed Projects1 Project Value Area % Collected of sold % Remaining Collections Project (Joint Ventures) Units (2) % Unit Sold % Value Sold (AED Mn) (SQF) value of Sold Value Dubai Hills Estates 4,156 16,956 16,873,188 90% 87% 80% 20% Sidra 2 423 1,739 1,130,388 99% 99% 65% 35%
Slide 50: UAE Development – Location of Development Projects
UAE Development – Location of Development Projects Emaar Beachfront(1) Mina Rashid Lusaily(2) The Valley Garden Arabian Ranches I & II Arabian Ranches III (1) Emaar Beachfront partial acquisition completed and launched in Jan 2018. In March 2018 an MOU with Aldar was signed to jointly develop the pr
Slide 51: UAE Development – Expected Delivery Schedule (Units)
UAE Development – Expected Delivery Schedule (Units) Under Development Delivery Schedule Under Already Completed Development delivered in 2020 2021 2022 2023 2020 - A - Emaar Development (fully consolidated) Downtown 13,565 7,999 450 551 2,505 3,029 1,914 Emaar Beachfront - 2,244 - - 907 617 720 Dub
Slide 52: UAE Development – Land Bank Details
UAE Development – Land Bank Details Land Bank Evolution through Investments & Strategic Partnerships Year Area 2012 Arabian Ranches II (million sq ft) GFA BTS 2011- H1 2020 Multiple CAGR 2013 Dubai Hills Estate ~22x ~45% 2014 Dubai Creek Harbour 2015 Emaar South 369 369 2016 Downtown Views, Ras Al K
Slide 53: International Development – Expected Delivery Schedule
International Development – Expected Delivery Schedule Under To be Cumulative Country Entity Completed 2020 2021 2022 2023 2024 Development developed till Jun 2020 Subsidiaries Emaar Misr 7,476 7,206 7,867 7,427 566 3,326 1,887 1,036 1,226 Emaar Middle 936 - - 731 73 132 - - - East Emaar Turkey 985
Slide 54: International Development – Land Bank Details
International Development – Land Bank Details Gross Land Area International Land Bank (Million SQFT) Saudi Arabia (Emaar Economic City) 1,119.41 Saudi Arabia (Emaar Middle East) 3.16 India (Emaar MGF) 154.23 Egypt 36.83 Pakistan 14.42 Turkey 5.25 Lebanon 3.15 Total Key International Markets 1,336.45
Slide 55: JV / JDA Accounting Treatment
JV / JDA Accounting Treatment Accounting P&L Balance Sheet Impact on Return on Capital Dubai Hills – • 100% consolidation • 100% consolidation • Neutral impact on ROCE Consolidation • 50% Minority Interest • 50% Minority Interest Mina Rashid – • 100% consolidation • 100% consolidation • Neutral impa
Slide 56: Hospitality Group – Current Portfolio
Hospitality Group – Current Portfolio Residences in Hotel Hotel Management Company Classification Keys Operational Pool (6) Emaar Hospitality Group Hotel Portfolio Dubai Armani Hotel at Burj Khalifa Armani Hotel - Dubai 5 Star 160 23 2010 Address Downtown Dubai TAH&R(2) 5 Star 220 193 2008 Address D
Slide 57: Hospitality Group – Hotels / Apartments Under Development
Hospitality Group – Hotels / Apartments Under Development Serviced Estimated Hotel Location Launch Keys 1 Apartments Completion Vida Dubai Marina Dubai Marina 2017 158 360 2022 Vida Dubai Mall Downtown 2017 195 380 2022 Rove La Mer La Mer District 2018 366 NA 2020 2 Rove City Walk City Walk 2018 564
Slide 58: Fair Valuation Overview – GAV By Segment
Fair Valuation Overview – GAV By Segment December 2019 Book Value Split December 2019 Fair Value SalesSplit Sales 2% 4% 3% 1% 7% 5% 35% 42% 22% 38% 23% 18% Total AED 117 Bn Total AED 184 Bn UAE Development International Development UAE Development International Development Retail & Leasing Hospitali
Slide 59: Fair Valuation Overview – GAV By Segment (Cont’d)
Fair Valuation Overview – GAV By Segment (Cont’d) GAV: Development Properties GAV: Fixed Assets 2019 2018 2019 2018 Book Fair Book Fair Book Fair Book Fair AED Million AED Million Value Value Value Value Value Value Value Value UAE 22,365 36,644 20,037 39,748 Hotels, Convention Center & Serviced 4,9
Slide 60: Fair Valuation Overview – NAV Table
Fair Valuation Overview – NAV Table 2019 2018 Book Value Fair Value Book Value Fair Value Cash and bank balances 6,796 6,796 9,494 9,494 Trade and Other Receivables 25,924 25,924 21,441 21,441 Development Properties 40,320 61,558 38,384 68,727 Investment in Associates and Joint Ventures 4,923 5,057
Slide 61: Group Structure
Group Structure (3) (3) 60 | EMAAR PROPERTIES
Slide 62: Thank You
Thank You EMAAR PROPERTIES Name – Abhay Singhvi Email id - ASinghvi@emaar.ae 61 | EMAAR PROPERTIES