Egyptian For Tourism Resorts · EGX:EGTS
Egyptian For Tourism Resorts — Egyptian Resorts Company (ERC) — Q2 2014 Earnings Presentation
46 slides from Egyptian For Tourism Resorts's earnings presentation, 2014
Slide 1: Investor Presentation Q2 2014
Investor Presentation Q2 2014
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 Strong shareholder base Unique value and experienced management proposition team for sub-developers and residents 4 Investor Presentation 3Q 2013
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) 32.91% First Arabian Company Authorized Capital (EGP) 2,000,000,000 10.00% Paid‐in‐Capi
Slide 10: ERC Corporate History
ERC Corporate History 2014 2014 ‐ onwards • Deliver the Sawari Marina project 2013 • The company ramps up marketing efforts with a view to capturing increased market 2011 share as tourism recovers 2010 ‐ 2013 2010 • New management augments existing internal structure taking company to next level in
Slide 11: Emerging from the Crisis: Another Opportunity
Emerging from the Crisis: Another Opportunity Dislocations post 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
Slide 12: Expiration of MoU with OHD
Expiration of MoU with OHD • In May 2014, ERC announced the signing of a Memorandum of Understanding (MoU) with Orascom Hotels and Development ( ODH ) to acquire from Orascom majority stakes in 3‐4 hotels and a significant bank of undeveloped land strategically located adjacent to Sahl Hasheesh. • O
Slide 13: 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 September 2013 – August 2014 (rebased to 100) ERC TMGH MNHD ODHN OCDI PHDC 300 270 240 210 180 150 120 90 60 30 0 Sep‐13 Nov‐13 Jan‐14 Mar‐14 May‐14 Ju
Slide 14: 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 15: A rare and established prime diving and sea-side destination
A rare and established prime diving 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 15 Investor Presentation 3Q 2013
Slide 16: A master-planned project roughly two-thirds the size of Manhattan
A master-planned 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 approximately • 18 km south of Hurghada Int’l Airport 470 kilometers from Cairo. The year‐round development – • 22
Slide 17: 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 resort city. The WATG
Slide 18: Sahl Hasheesh: Progress Benchmarks
Sahl Hasheesh: Progress Benchmarks Phases I and II of Sahl Hasheesh are currently home to more than 2,900 Phase 1 6 million m² hotel rooms and suites managed by brands including Premier Le Rêve, Premier Romance, Pyramisa, Old Palace in addition to 1,400 residential • Fully finished: 1,647 rooms (4 p
Slide 19: 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 deployed 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 ti
Slide 20: 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 21: 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 22: Revenue Stream 1: Land Sales
Land Sales Pisa SAHL HASHEESH RED SEA, EGYPT
Slide 23: 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 24: 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 global financial crisis and profit margins reached 84%. Weighted Average Sales Price/m² Achieved (US
Slide 25: Revenue Stream 2: Real Estate Development
Revenue Stream 2 Real Estate Development: Strategic Projects and Sahl Hasheesh Company
Slide 26: Strategic Real Estate Project by SHC – Old Town
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 27: 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 28: Strategic Real Estate Project by ERC – 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 meter
Slide 29: 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 ER
Slide 30: Strategic Real Estate Project by ERC – The Sawari Marina
2. Strategic Real Estate Project by ERC – The Sawari Marina 30 Investor Presentation 3Q 2013
Slide 31: Strategic Real Estate Project by ERC – 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 fl
Slide 32: 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 m
Slide 33: Jamaran Villas – New Commercial Strategy
3. Strategic Real Estate Project by ERC – Jamaran Villas • ERC adopted a new commercial strategy for Jamaran, which includes bringing on board two new sub developers to collaborate in developing and marketing different parts of the project. • ERC has brought in a developer who will buy villa plots t
Slide 34: Revenue Stream 3: Community and Utilities Management
Revenue Stream 3 Community and Utilities Management
Slide 35: Revenue Stream 3: Community and Utilities Management
Revenue Stream 3: Community and Utilities 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 36: 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 37: High stock liquidity with high growth potential
High stock liquidity with high growth potential… December 2013 – May 2014 (rebased to 100) Shares Outstanding 1,050,000,000 ERC EGX Share Price* EGP 1.68 240 Market Cap. (EGP)* 1,764,000,000 210 Average Daily Volume** 2,623,481 180 H1 2014 150 120 Revenue EGP 52.5 million 90 EBT EGP (20.3) million 6
Slide 38: Backed by a solid balance sheet (debt free)
… backed by a solid balance sheet that survived the revolution (debt free) Consolidated Liquid Assets and Liabilities (EGP Millions) 509.4 534.2 443.5 443.5 331.9 331.9 384.2 236.3 192.1 208.1 384.2 216.4 192.1 208.1 336.2 226.9 246.7 329.7 351.6 462.3 371.2 309.2 309.2 238.6 273.8 273.8 200.0 260.0
Slide 39: 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 40: Tourism on the Egyptian Red Sea
Tourism Sector Resilience, returning tourists and continued investment highlight sector Tourist Arrivals to Egypt | Millions Breakdown of Arrivals by Region of Origin | 2013 Egyptian Others Sharm El Sheikh Revolution 4.9% attacks Americans 2.5% EGP Devaluation 14.7 2nd Egyptian 12.8 Revolution 14.1
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) Mohamed Kamel, Chief Executive Officer Mr. Kamel is a former Board Member of ERC and Vice President of Corporate Development. Prior to ERC, he served in various roles with KATO Investment including Corporate Vice President for Strategy and Governance and Business Development Ma
Slide 43: Management Team (2/2)
Management Team (2/2) Hazem Kassem, Director ‐ Approvals & Compliance, Planning and Development Prior to joining ERC in 2008, Mr. Kassem launched an architecture and interior design firm in Cairo that has, over a seven year span, successfully delivered more than 45 commercial and residential project
Slide 44: Select Consolidated Financials
Select Consolidated Financials From the Income Statement (EGP 000,000’s) 2009 2010 2011 2012 2013 H1 14 Revenue 25.8 14.9 28.2 40.5 28.9 52.5 Gross Profit 12.1 (5.8) (2) (11.3) (23.1) (1.8) EBT 3.9 (7.8) (3.2) (106.9) (43.1) (20.3) Net Income 4.7 (9.4) (7.4) (110.0) (47.7) (21.3) From the Balance Sh
Slide 45: Sahl Hasheesh project images
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 Development and large ga
Slide 46: www.erc-egypt.com www.sahlhasheesh.com
www.erc‐egypt.com www.sahlhasheesh.com
Egyptian Resorts Company (ERC) — Q2 2014 Earnings Presentation on 6ix