Talaat Moustafa Group Holding · EGX:TMGH
Talaat Moustafa — Investor Presentation (December 2019)
30 slides from Talaat Moustafa's investor presentation, December 2019
Slide 1: Strategy Presentation December 2019
STRATEGY PRESENTATION DECEMBER 2019 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 outstanding track-re
Slide 3: Our footprint
Our footprint Alexandria Greater Cairo Sharm El Sheikh Marsa Alam Luxor Investor presentation 3
Slide 4: Recent milestones
Recent milestones Achieved strong sales of EGP14.5bn in 9M2019, the highest in the Egyptian market, of which EGP282mn represented stand-alone club membership sales. The result is 54% higher y-o-y if adjusted for Celia launch last year and 73% higher y-o-y if adjusted for school sales. Key recurring
Slide 5: Key financial highlights of 9M2019
Key financial highlights of 9M2019 Revenue Gross profit Recurring +9% y-o-y 2% 6,000 +7% y-o-y 2,000 7% 5,000 1,500 4,000 2% EGPmn EGPmn +38% y-o-y 10% 4% 3,000 +29% y-o-y 1,000 8% Further improvement 2,000 500 in revenue mix with 1,000 4,748 2,064 5,092 2,668 1,708 715 1,863 984 - - strong growth i
Slide 6: TMG at a glance
TMG at a glance [TMGH.CA/TMGH EY] as at end-9M2019 MENA’s leading developer(1) c100k+ units delivered 875 operational hotel #1 Egyptian RE developer over 90k / 3.1k units sold rooms by market cap (since inception, including ministry units) (since inception / 9M2019 only) Highest cumulative deliverie
Slide 7: We continue to deliver on our key strategic priorities
We continue to deliver on our key strategic priorities previously communicated to the market New sales [EGPbn] Backlog [EGPbn] 18.3 47.7 14.5 Achieving robust growth in sales 41.3 FY2019e sales target: EGP24bn, up 13% y-o-y on FY2018a of EGP21.3bn 9M2018 9M2019 9M2018 9M2019 The Group invested EGP1b
Slide 8: We are on track to achieve all-time high sales
We are on track to achieve all-time high sales Evolution of total sales accross all Evolution of non-residential sales accross all Evolution of residential sales across all projects projects projects 25.0 4.0 20.0 3.5 18.0 20.0 16.0 3.0 14.0 15.0 2.5 12.0 EGPbn EGPbn EGPbn 2.0 10.0 10.0 1.5 8.0 6.0
Slide 9: Strategic vision allowed for early foothold in East Cairo
Strategic vision allowed for early foothold in rapidly urbanizing East Cairo Population: 30k Population: 1.5mn Population: 4.5mn Expected population: 10mn Investor presentation 9
Slide 10: Madinaty – a full-fledged booming international city
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 11: 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 12: 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 13: Privado perspectives
Privado perspectives Investor presentation 13
Slide 14: 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 Sales status as at end-9M2019 market 100% 500 feddans 1.07mn sqm 80% Celia land area Total residential area Celia is a new mixed-use development located on 500
Slide 15: Continue investing in hotel portfolio
Continue investing in hotel portfolio – significant improvement across all KPIs 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 segment to 83
Slide 16: 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 1,400 70% 1,318 346 1,200 97 1,000 875 EGPmn 800 600 65% 400 200 1,046 1,191 0 9M18* 9M19 2018 Sep-2020 FS Sharm El Sheikh Jun-202 3 Four Seasons 2023 target
Slide 17: Significant improvement across hotel KPIs
Significant improvement across hotel KPIs Four Seasons Nile Plaza KPIs* Kempinski Nile Hotel KPIs ARR Occupancy (RHS) Revenue ARR Occupancy (RHS) Revenue 6,000 76% 78% 100% 1,200 2,500 81% 80% 85% 100% 200 71% 73% 5,000 65% 80% 1,000 2,000 63% 80% 54% 150 4,000 800 EGPmn 60% 1,500 60% EGP EGP EGP 3,
Slide 18: 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 140 200 120 180 160 100 140 84 80 k sqm 120 +25% y-o-y EGPmn 60 127.5 100 40 80 60 20 44 40 0 20 Leased GLA Open Air mall opening Total GLA 143 180 (start ope
Slide 19: 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 20: About Open Air Mall
About Open Air Mall 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 the outside GLA of 92k sqm + some 6,000 parking spots Modular designed consisting of 8 buildings connected b
Slide 21: 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 600 250 500 200 k memberships 400 150 EGPmn 300 151 +119% y-o-y 100 197 200 50 100 46 243 531 - 0 9M2018 9M2019 Sold memberships Memb
Slide 22: 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 23: Continue building our recurring income portfolio
Continue building our recurring income portfolio – target 40-45% of consolidated gross profit The Spine(1) 400k sqm of retail portfolio 35:65% / BTS:BTL 635k sqm of office GLA 25:75% / BTS:BTL 600+ hotel keys to be managed by operators Uptown Note (1): Areas subject to change as per the final master
Slide 24: 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 25: Maintain robust growth in sales in existing projects
Maintain robust growth in sales in existing projects ■ EGP14.3bn of net cash flow from backlog and ■ EGP47.7bn of backlog Historical sales delivered units ■ Avg. gross profit margin 30%-35% ■ Land bank sufficient for the next 16 years ■ 11.5mn sqm ■ Sell all remaining units in Al Rehab and Al Unlaun
Slide 26: 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 27: 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 28: Preserving capital appreciation while providing a dividend stream
Preserving capital appreciation while providing a dividend stream Net cash from contracted sales ■ cEGP14.3bn net cash flow pre-tax from backlog sales ■ 11.5 mn sqm (BuA) of BTS residential Net cash from future residential assets to be launched and sold in the Avg. sales price of at least EGP20k/sqm
Slide 29: Share price performance beating the indices since 2H2017
Share price performance beating the indices since 2H2017 TMG share price performance compared to EGX indices Key facts 15.0 14.0 Listed on EGX since 2007 13.0 12.0 c2,063mn shares outstanding 11.0 EGP 10.0 No foreign ownership limits 9.0 8.0 Shariah observant 7.0 Reuters/BBG: TMGH.CA/TMGH EY 6.0 May
Slide 30: Thank you
Hk =1E Thank you TMG Holding
Talaat Moustafa Group Holding — Investor Presentation (December 2019) on 6ix