Talaat Moustafa Group Holding · EGX:TMGH
Talaat Moustafa — Investor Presentation (September 2020)
42 slides from Talaat Moustafa's investor presentation, September 2020
Slide 1: Strategy Presentation September 2020 (1H2020)
STRATEGY PRESENTATION SEPTEMBER 2020 (1H2020) TMG Holding S.A.E. .م.م.ﻣﺠﻤﻮﻋﺔ ﻃﻠﻌﺖ ﻣﺼﻄﻔﻰ اﻟﻘﺎﺑﻀﺔ ش ( +20 2 3331 2000 Publicly held since 2007 34/36 Mossadek St., Dokki اﻟﺪﻗﻲ، ﺷﺎرع ﻣﺼﺪق٣٤/٣٦ IR@tmg.com.eg EGX: TMGH.CA / TMGH EY ﻣﺼﺮ،اﻟﺠﻴﺰة Giza, Egypt www.talaatmoustafa.com
Slide 2: About TMG Holding
About TMG Holding Talaat Moustafa Group Holding (TMG Holding) a leading conglomerate with special emphasis on developing integrated communities, including but not limited to mixed-use real estate and hospitality projects across Egypt’s key cities. It has an Market capitalization (as in September 202
Slide 3: Completed a large-size land sale transaction in 3Q2020 [1/2]
Completed a large-size land sale transaction in 3Q2020, in line with earlier guidance [1/2] In August 2020, TMG Holding has successfully entered a strategic alliance with National Transaction value Bank of Egypt and Banque Misr, the two largest and oldest operating Egyptian banks, which will develop
Slide 4: Completed a large-size land sale transaction in 3Q2020 [2/2]
Completed a large-size land sale transaction in 3Q2020, in line with earlier guidance [2/2] The transaction is a solid testimony to TMG Holding management’s ability to swiftly and proactively tap into unconventional and sizable sources of funding to the benefit of the Group and its shareholders whil
Slide 5: Market capitalization does not accurately capture the value of fully owned land bank
Market capitalization does not accurately capture the value of fully owned land bank and other assets We estimate the market value of our fully owned land bank in Madinaty and Rehab (i.e., Market value of fully-paid land bank* fully paid, carrying no further financial obligations, for which all land
Slide 6: Key financial highlights of FY2019
Key financial highlights of FY2019 Revenue Gross profit Recurring +10% y-o-y 2% 10,000 +9% y-o-y 4,000 7% 8,000 3,000 +5% y-o-y 8% 2% EGPmn EGPmn 6,000 +13% y-o-y 5% 4,000 2,000 Further improvement 10% 2,000 1,000 in revenue mix with 7,495 3,432 8,152 3,592 2,834 1,223 3,128 1,384 - - strong growth
Slide 7: Strengthening market lead in 2019
Strengthening market lead in 2019 Total sales* FY2019 new sales reached a robust EGP20.4bn, confirming the company’s unchallenged leadership in terms of market share and its ability to take advantage of the existing demand. EGP20.4bn Despite the brief market slow-down in 2H2019, as evidenced by exte
Slide 8: Largest sukuk issuance completed during 1H2020
Largest sukuk issuance completed during 1H2020 During 2Q2020, Arab Company for Projects and Urban Development (Arab Company), the owner of Madinaty and Rehab projects, has successfully issued Islamic sukuk worth EGP2.0bn in a first-of-its kind transaction in Egypt. The issuing company and the sukuk
Slide 9: Key financial highlights of 1H2020
Key financial highlights of 1H2020 Revenue Gross profit Recurring 4,000 1,500 +4% y-o-y 5% 2% Recurring revenue +9% y-o-y contribution in 1H20 3,000 1,000 2% temporarily impacted EGPmn EGPmn -56% y-o-y 14% 6% 2,000 by preventive measures -33% y-o-y 500 1,000 15% imposed by authorities 3,039 1,903 3,
Slide 10: Robust business model and the COVID-19 pandemic in 1H2020
Robust business model and the COVID-19 pandemic in 1H2020 Total sales* FY2019 new sales reached a robust EGP20.4bn, confirming the company’s unchallenged leadership in terms of market share and its ability to take advantage of the existing demand. 1H2020 sales reached 4.5bn, reflecting negative pres
Slide 11: Our footprint
Our footprint Alexandria Greater Cairo Sharm El Sheikh Marsa Alam Luxor Investor presentation 11
Slide 12: TMG at a glance
TMG at a glance [TMGH.CA/TMGH EY] as at FY2019 and 1H2020 MENA’s leading developer(1) over 90k / 3.6k / 885 units c100k+ units delivered 905 operational hotel #1 Egyptian RE developer sold rooms by market cap (since inception) (since inception / FY2019 / Highest cumulative deliveries by a 443 rooms
Slide 13: We continue achieving strong sales and expanding our market share
We continue achieving strong sales and expanding our market share Evolution of total sales across all projects Evolution of non-residential sales across all Evolution of residential sales across all projects projects 25.0 20.0 6.0 18.0 20.0 5.0 16.0 14.0 15.0 4.0 12.0 EGPbn EGPbn EGPbn 10.0 3.0 10.0
Slide 14: Low-risk business model shielded by recurring income and low leverage
Low-risk business model shielded by recurring income and low leverage REAL ESTATE DEVELOPMENT BUSINESS MODEL RECURRING INCOME LINES § Low-risk, self-financed off-plan development model leveraging on longstanding § Reliable source of cashflow to finance growth and dividends marketing and engineering
Slide 15: We continue to deliver on our key strategic priorities
We continue to deliver on our key strategic priorities previously communicated to the market Reporting highest NET sales in the market Achieving robust sales and expanding market share during 2020. 9M2020 sales expected to exceed EGP11bn. The Group invested EGP1bn to increase its stake in ICON to 83
Slide 16: Strategic vision allowed for early foothold in rapidly urbanizing East Cairo
Strategic vision allowed for early foothold in rapidly urbanizing East Cairo Madinaty Rehab THE 5th SETTLEMENT NEW ADMINISTRATIVE CAPITAL Celia <- to Central Cairo to Suez -> Source: Google Earth Investor presentation 16
Slide 17: Madinaty – a full-fledged booming international city in East Cairo
Madinaty – a full-fledged booming international city in the heart of East Cairo Madinaty is TMG’s flagship mixed-use city in East Cairo spanning over a Land area massive area of 33.6 km2, launched in 2006 and to be fully completed by 117k residential Over 4mn sqm of 2035 33.6 km2 units non-residenti
Slide 18: Madinaty master plan
Madinaty master plan – incorporating a solid long-term vision ahead of its time World-class planning and vision Designed by renowned international architects, such as Sasaki, SWA, HHCB, Dar, F+A, HR&A, among others Provides for tranquility of residential quarters and immediate accessibility to comme
Slide 19: Privado – further diversifying the product of Madinaty
Privado – further diversifying the product of Madinaty A value proposal leveraging on quality services Centrally located… of Madinaty paired with tranquility of a gated 276 feddans 1.1mn sqm Privado will grant its residents Privado land area Total residential area compound… an easy access to top-not
Slide 20: Privado perspectives
Privado perspectives Investor presentation 20
Slide 21: Case in point: successful launch and sales of Celia
Case in point: successful launch and sales of Celia – a testament to the strength of TMG brand Unmatched brand equity of TMG in the Egyptian market Celia is a new mixed-use development located on 500 feddans in the New Administrative Capital (NAC) – largest land plot launched in NAC to date Total re
Slide 22: Continue investing in hotel portfolio
Continue investing in hotel portfolio Hospitality segment performance Freed liquidity from monetizing non-core assets and invested EGP1.0bn in ICON in a value accretive 1,800 60% transaction, increasing stake in TMG’s yielding hospitality 1,600 50% segment to 83.3% 1,400 1,200 40% 443 new keys under
Slide 23: Continue building our recurring income portfolio – hotels
Continue building our recurring income portfolio – target 40-45% of consolidated gross profit Revenue and occupancy rate Hotel rooms evolution 1,800 1,600 1,348 346 1,400 1,200 68% 71% 97 EGPmn 1,000 905 800 600 400 200 1,430 1,603 0 FY201 8* FY201 9 Revenue Occupancy 2020 2021 FS Sharm El Sheikh Ex
Slide 24: Summary of hotel KPIs across all properties
Summary of hotel KPIs across all properties Four Seasons Nile Plaza KPIs* Kempinski Nile Hotel KPIs ARR Occupancy (RHS) Revenue ARR Occupancy (RHS) Revenue 300 75.0%79.7% 77.3% 100% 1,000 150 81.1%86.0% 82.3% 100% 200 250 64.7% 73.2% 80% 800 80% 150 200 100 EGPmn 60% 600 60% USD EGP USD 150 35.4% 35
Slide 25: Continue building our recurring income portfolio – retail
Continue building our recurring income portfolio – target 40-45% of consolidated gross profit Retail GLA Retail revenue grows in significance 140 250 120 200 100 73 80 k sqm 150 EGPmn 60 127.5 40 100 54 20 50 0 Leased GLA Open Air mall opening Total GLA 180 237 (start operations over - 2019) FY201 8
Slide 26: Catchment of Madinaty City Center
Catchment of Madinaty City Center 40km 10km Madinaty City Center primary catchment area covers the populations of Al Shoruk and Al Badr Cities, New Administrative Capital, El Mostakbal City and many smaller gated compounds Secondary catchment area extends to Nasr City and Heliopolis neighborhoods an
Slide 27: Success of Open Air Mall is a solid testimony for Madinaty's potential
Success of Open Air Mall is a solid testimony for Madinaty’s potential Open Air Mall is the newest hot retail spot of East Cairo A new regional mall in Madinaty built on 406k sqm of land on Northern edges, immediately surrounded by residential communities within the project and with easy access from
Slide 28: Continue building our recurring income portfolio – clubs
Continue building our recurring income portfolio – target 40-45% of consolidated gross profit Club revenue grows in significance Club memberships – sold and remaining 1,000 250 900 800 200 700 k memberships 600 150 EGPmn 500 150 400 100 197 300 200 50 100 47 579 865 - 0 FY2018 FY2019 Sold membership
Slide 29: Sporting clubs perspectives
Sporting clubs perspectives Investor presentation 29
Slide 30: Maintain robust growth in sales in existing projects
Maintain robust growth in sales in existing projects The Spine(1) Fully integrated residential complex including retail, leisure, hospitality, and offices designed to international standards 2.7mn sqm land area 4.5mn sqm total BuA(2) 13 years of development Downtown 2.3mn sqm of residential BuA Civi
Slide 31: The Spine perspectives [1/2]
The Spine perspectives [1/2] Strategic location, unique accessibility, superior standards and quality infrastructure Investor presentation 31
Slide 32: The Spine perspectives [2/2]
The Spine perspectives [2/2] Fully integrated residential complex including retail, leisure, hospitality, and offices designed to international standards Investor presentation 32
Slide 33: The Spine concept
The Spine concept Entertainment and mixed-use Family and nature Sophisticated living Privado neighborhood Uptown Parkside Each district is tailored for a specific target audience: Downtown: seniors, families and youth Parkside: families and youth Downtown Uptown: professionals Investor presentation
Slide 34: The Spine – a new heart of East Cairo
The Spine – a new heart of East Cairo, securing long-term recurring income Our development track-record and communities that we have created has given us a unique opportunity to develop a state-of-the-art retail and commerce center, the downtown area of Madinaty, aka the Spine. We have finalized the
Slide 35: Maintain robust growth in sales in existing projects
Maintain robust growth in sales in existing projects ■ EGP15bn of net cash flow from backlog and ■ EGP48.6bn of backlog Historical sales delivered units ■ Avg. gross profit margin 30%-35% ■ Land bank sufficient for the next 16 years ■ Sell all remaining units in Al Rehab and Al Unlaunched residentia
Slide 36: Monetize value of certain assets at the right timing
Monetize value of certain assets at the right timing ■ We believe that today the market does not ascribe value to most of our recurring income portfolio (namely hotels, retail, clubs, and non-residential land bank) which offers a significant long-term upside for equity investors Potential monetizati
Slide 37: Disciplined and selective land acquisition approach
Disciplined and selective land acquisition approach Strategic acquisition criteria Financial acquisition criteria ■ Large plots that allow for the development of urban ■ Preference towards cash acquisitions to manage communities targeting the middle to upper middle financial risk classes ■ Opportuni
Slide 38: Preserving capital appreciation while providing a dividend stream
Preserving capital appreciation while providing a dividend stream Net cash from contracted sales ■ cEGP15bn net cash flow pre-tax from backlog sales ■ 11mn sqm (BuA) of BTS residential Net cash from future residential Avg. sales price of at least EGP20k/sqm at assets to be launched launches ■ Averag
Slide 39: Focused on corporate responsibility
Focused on corporate responsibility BUILDING SUSTAINABLE ENABLING ECONOMIC FOCUSED ON SOCIAL COMMUNITIES GROWTH IMPACT § Shariah compliant – no exposure to alcohol sales As a leading developer in Egypt, TMG continues to § Serving population of some 700 thousand or gambling build self-sufficient sust
Slide 40: Share price performance compared to indices since 2H2017
Share price performance compared to indices since 2H2017 Share price performance of TMGH compared to Key facts EGX indices since July 2017 15.0 Listed on EGX since 2007 13.0 c2,063mn shares outstanding 11.0 Shariah compliant EGP 9.0 7.0 Reuters/BBG: TMGH.CA/TMGH EY 5.0 Member of EGX30 index and MSCI
Slide 41: Shareholder structure as at end-1H2020
Shareholder structure as at end-1H2020 Key shareholders Shareholders by geography Minority shareholders by geography Egypt Egypt 3% 2% Europe 4% Europe 7% TMGI GCC 12% GCC 9% 31% Alexandria 42% 43% North America North America Construction Co. Central America Central America Rimco Investment 12% MENA
Slide 42: Thank you
Hk =Le Thank you TMG Holding
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