Emaar Properties (P.J.S.C) · DFM:EMAAR
Emaar Properties (P.J.S.C) — Emaar Properties — Q1 2019 Earnings Presentation
62 slides from Emaar Properties (P.J.S.C)'s earnings presentation, May 20, 2019
Slide 1: Prepared for the Future
EMAAR PROPERTIES Prepared for the Future Built on Strength, Prudence & Resilience. Investor Presentation May 2019 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 Q1 2019 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 • Vision to redefine engineering environments, 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 20 Hotels with c. 4,000 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 Future Growth Potential Total Revenues In AED Mn 25,694 ✓ Consistent growth delivered in difficult market 27% environment post 2014 oil price crash 18,752 15,540 15,411 13,661 ✓ Good business mix with st
Slide 8: Healthy Dividend Payout
Healthy Dividend Payout Strong Track Record and Proven Expertise To Generate Healthy, Predictable And Sustainable Returns In AED Bn 303% 10.0 21% 4.0 8% 72% 4% 3% 4% 1.0 1.1 1.1 1.1 2% 3% 2% 34% 29% 38% 26% 20% 0.6 0.6 18% 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 20
Slide 9: Strong Balance Sheet
Strong Balance Sheet Solid Credit Profile with very Comfortable Net Debt-to-Equity and Significant Debt Coverage AED Million Mar 2019 Comfortable Debt Maturity Profile – Mar 2019 Debt 20,125 Cash 8,580 Net Debt 11,545 5,925 5,715 Equity 58,961 3,698 Total Assets 112,646 2,535 1,951 Key Ratios Mar 20
Slide 10: 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) -39% 2019 Implied Cap Rate 2 52.0 Premium / (Discount) to BV -73% Emaar Malls 11.1% 29.6 US Peers 5.9% Premium / (Discount) to NAV EU Peers 5.7% 20
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 (More than 3x in 2018) In AED Bn 18.0 ✓ Displayed strong sales traction, despite 14.4 14.4 difficult
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 ✓ 4.3 Mn sq. ft. GLA (incl. Fashion Avenue Expansion) ✓ 98% Leased, 95% Occupancy ✓ 1,200+ stores with leading retailers and marquee global brands ✓ 83 Mn Foot
Slide 15: Delivering Robust Growth
…Delivering Robust Growth Emaar Malls Delivered Consistent Growth over 2012 to 2018 Robust Growth in Footfalls… 6,095 5,158 5,295 5,371 5,423 5,419 5,368 ✓ Preferred gateway to Dubai’s consumerism for aspiring retailers and brands 7% 114 124 125 130 136 104 ✓ Urban lifestyle destination and unique r
Slide 16: And Consistently Outperforming the Market
…And Consistently Outperforming the Market Emaar Malls Outperformed Dubai Retail Market over 2017-2018 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 4% 2% -3% -12% -13% 2018 -18% 2018 2018
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% 59.0% ✓ Dubai Aquarium & Underwater Zoo 1,389
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 ✓ Hospitality sector will be the key be
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 Markets Development Retail Entertainment Hospitality ✓ c. 35,500 units sold & c. 17,000 units ✓ Own & operate iconic ✓ Launch entertainment ✓ Adopt an asset-light delivered since 2002
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: Our Assessment Of The Dubai's Economy
Our Assessment Of The Dubai’s Economy Dubai Economy Back on Recovery Dubai economy is expected to grow at 2.1% in 2019 and 3.8% in 2020 1 Tourism Growth Positive Tailwinds • Tourism is one of the pillars of • 10 Year Resident Visa Dubai’s economy Sustained Population Growth • 100% Foreign Investment
Slide 23: Residential Real Estate To Gradually Move Towards Equilibrium
Residential Real Estate To Gradually Move Towards Equilibrium Key Factors Affecting Increased Affordability Residential Market Equilibrium Investment Attractiveness Supply Rationalisation • Dubai’s GDP Per Capita2 (PPP terms) - USD 59,419 in 2012 to USD 67,293 in 20171 • Historical avg. materializat
Slide 24: UAE Development Strategy
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 25: 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 26: UAE Retail Strategy: Adopt Low-Risk Model For Future Expansions
UAE Retail Strategy: Adopt Low-Risk Model For Future Expansions Projects under Emaar Malls GLA Expected Project Name Operate As Pure Rental Income Play (‘000 sq.ft.) Opening Meadows Village c. 95 H2 2019 • Pure Rental Income Play TDM Boulevard Expansion c. 110 H2 2020 • Focus on rental income growth
Slide 27: Capital Allocation Strategy
Capital Allocation Strategy: Achieve Sustainable Growth & Maximise Shareholder Returns Focus on Sustained Dividend Payout in Future Emaar Properties (EP) Emaar Development (ED) Emaar Malls (EM) Cash Flow Generation Cash Flow Generation Cash Flow Generation • International Development (AED 12.1 Bn •
Slide 28: Q1 2019 Results Update
Q1 2019 Results Update 27 | EMAAR PROPERTIES
Slide 29: Q1 2019 Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Q1 2019 Key Highlights Highest Property Sales Sales to International Revenues in UAE at AED 6.0 Bn Customers grew 123% to AED 2.6 Bn AED 5.9 Bn +53% YoY EBITDA Net Profit 31% Recurring Revenues AED 2.7 Bn AE
Slide 30: Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Key Highlights 1 AED Million Q1 2019 Q1 2018 % Change Group Property Sales 6,744 4,772 41% Revenue 5,894 5,929 (1%) Gross Profit 3,002 3,089 (3%) Margin (%) 50.9% 52.1% - EBITDA 2,697 2,602 4% Margin (%) 45.
Slide 31: Segment Analysis
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Segment Analysis Segment Wise Revenues (AED Mn) Revenue Share % EBITDA Share % - 1% 6% 10% -1% 7% 5,929 5,894 10% 350 386 18% 451 388 AED AED + 10% 5,894 Mn 2,697 Mn 1,021 1,040 49% 846 - 14% 737 57% 12% 27%
Slide 32: Historical Trend
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Historical Trend In AED Mn Revenues Gross Profit CAGR 27% CAGR 22% 12,883 25,694 18,572 9,374 15,540 8,100 13,661 7,263 5,903 9,893 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 EBITDA Net Profit After M
Slide 33: 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 112,646 Mn Bank Balances & 1,118 Cash 8% Trade & Other 16% Payables 8,963 Trade & Other Advances from 20% Rec
Slide 34: UAE Development – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development UAE Development – Key Highlights 3 AED Million Q1 2019 Q1 2018 % Change Property Sales 5,979 3,906 53% Revenue 3,344 3,260 3% Gross Profit 1,403 1,441 (3%) Margin (%) 42.0% 44.2% - EBITDA 1,323 1,243 6% Marg
Slide 35: Emaar Development – Current Project Status
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Development – Current Project Status 100% Owned Developments 100% Consolidated JV JV/JDAs with 50% Share Downtown Arabian Dubai Emirates Emaar Dubai Dubai Emaar 4 3 Total Dubai Ranches Marina Living Be
Slide 36: 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 49% CAGR 38% 6,700 15,433 8,863 3,761 6,899 2,861 5,253 2,395 1,841 3,140 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 EBITDA Ne
Slide 37: International Development – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development International Development – Key Highlights International Sales – Units Released Projects Launched in Q1 c. AED 0.8 Bn Sales Booked 2019 with a total value of in Q1 2019 c. AED 364 Mn c. 880 Units c. 15,500 U
Slide 38: 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 • Delivered 114 units in Q1 FY 2019 AED Million EGP Million • Property sales grew by 28% to EGP 1.9 Bn in Q1 2019 Q1 2018
Slide 39: Emaar Malls – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Malls – Key Highlights1 AED Million Q1 2019 Q1 2018 % Change Revenue 1,039 1,021 2% Gross Profit 853 817 4% Margin (%) 82.0% 80.0% - EBITDA 736 717 3% Margin (%) 70.8% 70.2% - Net Profit 508 478 6% Mar
Slide 40: Emaar Malls (Excl. Namshi) – Historical Trend
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Malls (Excl. Namshi) – Historical Trend Rental Income EBITDA In AED Mn CAGR 8% CAGR 10% 3,599 3,227 3,323 2,934 2,992 2,676 2,694 2,447 2,250 2,018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Net
Slide 41: Namshi – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Namshi – Key Highlights Namshi Revenues 1 (AED Mn) CAGR 50% 849 Net Merchandise Gross Profit Value + 5% 730 + 17% 555 Active Customers2 Online Traffic 440 + 26% + 9% Social Media 167 Number of Orders Engagem
Slide 42: Emaar Hospitality – Key Highlights
Consolidated International UAE Development Emaar Malls Emaar Hospitality Results Development Emaar Hospitality – Key Highlights AED Million Q1 2019 Q1 2018 % Change Key Highlights Occupancy Rate • Achieved higher than market average ADR 85% 87% (%)* and Occupancy RevPar (AED)* 1,049 1,109 (5%) • 5 H
Slide 43: 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 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Available Room Nights 17,640 17,640 21,780 21,780 21,960 21,
Slide 44: Annexure
Annexure 43 | EMAAR PROPERTIES
Slide 45: 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 46: UAE Development – Projects Overview
UAE Development – Projects Overview Wholly-owned projects Downtown Dubai Arabian Ranches Dubai Marina Emirates Living Emaar Beachfront * All under-construction Expansion of the current Two waterfront Green-focused development An exclusive residential projects (including Sky Arabian Ranches community
Slide 47: UAE Development – Projects Overview
UAE Development – Projects Overview 100% Consolidated JV JVs/JDAs with 50% share Dubai Hills Estate Dubai Creek Harbour Emaar South Zabeel Square Joint Venture between Emaar and Joint Venture between Emaar and Joint Venture between Emaar and Joint venture between Emaar and Meraas Holding to create a
Slide 48: UAE Development – Projects Under Development
UAE Development – Projects Under Development Amount Area % Unit % Value % Collected of % Completion % Gross Margin Project (100% Owned) Units (1) Launched Period (2) (AED) (SQF) Sold Sold sold units Mar.19 Mar19 Downtown Dubai 9,441 33,237,003,219 12,150,314 93% 88% 45% 40% Fountain Views 2 289 1,10
Slide 49: UAE Development – Projects Under Development (cont'd)
UAE Development – Projects Under Development (cont’d) Amount Area % Unit % Value % Collected of % Completion % Gross Margin Project (Joint Ventures) Units (1) Launched Period (2) (AED) (SQF) Sold Sold sold units Mar.19 Mar.19 (3) Dubai Hills Estates 8,215 20,423,912,156 13,518,382 87% 89% 45% 45% Mu
Slide 50: UAE Development – Location of Development Projects
UAE Development – Location of Development Projects 49 | EMAAR PROPERTIES
Slide 51: UAE Development – Expected Delivery Schedule
UAE Development – Expected Delivery Schedule Under Development Delivery Schedule Under Completed Development 2019 2020 2021 2022 - A - Emaar Development (fully consolidated) Downtown 11,366 9,441 3,027 3,391 919 2,104 Emaar Beachfront - 1,248 - - 1,248 - Dubai Marina 4,450 838 - 838 - - Arabian Ranc
Slide 52: UAE Development – Land Bank Details
UAE Development – Land Bank Details Land Bank Evolution Though Investments & Strategic Partners Year Area 2012 Arabian Ranches II (million sq ft) GFA BTS 2011-2018 Multiple CAGR 2013 Dubai Hills Estate 16x +49% 2014 Dubai Creek Harbour 231 233 234 234 2015 Emaar South 211 211 198 199 2016 Downtown V
Slide 53: International Development – Expected Delivery Schedule
International Development – Expected Delivery Schedule Under To be Cumulative Country Entity Completed 2019 2020 2021 2022 2023 Development developed till Mar 2019 Subsidiaries Emaar Misr 6,328 6,852 8,239 6,297 1,083 1,649 1,209 1,431 3,710 Emaar Middle 644 283 - 552 262 113 - - - East Emaar Turkey
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) 1,118.59 Saudi Arabia (Emaar Middle East) 34.99 India (Emaar MGF) 146.92 Egypt 52.74 Pakistan 16.22 Turkey 6.08 Lebanon 3.42 Total Key International Markets 1,378.9
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 BTS projects – JDA • Recoverable under joint • 50% profit recognised a
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 Residences Downtown 2013 NA 344 2019 Address Sky View Downtown 2013 169 551 2019 Address Fountain Views Downtown 2013 194 786 2019 Vida Hills Hotel & Residences Emirat
Slide 58: Fair Valuation Overview – GAV By Segment
Fair Valuation Overview – GAV By Segment Market Value of Assets is 1.7x of the Book Value Fair valuation is carried out by CBRE, DTZ and other reputable valuers for development properties (including land), investment properties and revenue generating fixed 57 | EMAAR PROPERTIES assets. The above do
Slide 59: Fair Valuation Overview – GAV By Segment (Cont'd)
Fair Valuation Overview – GAV By Segment (Cont’d) GAV: Development Properties GAV: Fixed Assets 2018 2017 2018 2017 Book Fair Book Fair Book Fair Book Fair AED Million AED Million Value Value Value Value Value Value Value Value UAE 20,067 39,748 16,787 36,819 Hotels, Convention 3,058 4,880 4,200 7,4
Slide 60: Fair Valuation Overview – NAV Table
Fair Valuation Overview – NAV Table 2018 2017 Book Value Fair Value Book Value Fair Value Cash and bank balances 9,494 9,494 21,103 21,103 Trade and Other Receivables 21,977 21,977 13,949 13,949 Development Properties 38,384 68,727 36,721 68,873 Investment in Associates and Joint Ventures 4,701 3,97
Slide 61: Group Structure
Group Structure Emaar Properties (3) (100%) (3) Businesses Fully Consolidated Entity Equity Accounted Entity Note : 1) Only built to sell projects are held by Emaar Development and JV partners. Build to lease and operate (BTL/BTO) projects are directly held by Emaar Properties PJSC and JV partners.
Slide 62: Thank You
Thank You EMAAR PROPERTIES DICKENSON IR Name – Abhay Singhvi Name – Mehul Mehta / Aakash Mehta Email id - ASinghvi@emaar.ae Email id – emaar@dickensonworld.com 61 | EMAAR PROPERTIES