Palm Hills Development Co. · EGX:PHDC
Palm Hills Development — Palm Hills Developments — Investor Presentation (January 2016)
54 slides from Palm Hills Development's investor presentation, January 2016
Slide 1: Investor Presentation January 2016
Palm Hills Developments | January 2015 Investor Presentation January 2016
Slide 2: Disclaimer
DISCLAIMER This presentation is being provided to you on a confidential basis and may not be distributed or reproduced in any form. 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 o
Slide 3: Agenda
Agenda Introduction Building on Success Competitive Landscape Financial Statements Appendix 4 10 30 34 38 Palm Hills Developments | 2015 | Investor Presentation 3
Slide 4: Introduction
Introduction
Slide 5: PHD Synopsis
INTRODUCTION PHD Synopsis Key Facts (1) Ownership Structure (2) Shareholders by Country (2) Aabar Investments, USA, 3.1% EU, 5.1% Backlog: EGP8.0 bn Contracted Sales: EGP16.8 bn Ripplewood, 5.6% Outstanding Receivables: EGP7.2 bn / 9,084 units 2.5% UK, 4.8% Arab, Free Float, 13.7% 15.9% MMID, Comple
Slide 6: Well diversified projects portfolio over a 26.3 million sqm land bank
INTRODUCTION Well diversified Projects’ Portfolio, spreading over a land bank of 26.3 million sqm Projects Under Development Raw Land Available for Development Completed Projects (‘000 sqm) Residential Commercial (‘000 sqm) Residential Commercial (‘000 sqm) Residential Commercial Cairo West West Cai
Slide 7: Improving liquidity, enhancing operations and boosting profitability
INTRODUCTION Improving liquidity, enhancing operations and boosting profitability, with FY2015 expected to be a record year on all fronts Revenue (EGP MN) Gross Profit (EGP MN) EBITDA (EGP MN) 37% 37% 673 2,603 33% 960 2,106 502 27% 22% 26% 705 24% 362 1,328 494 15% 969 140 218 572 392 (1) (1) 2011
Slide 8: Balance Sheet is now in its strongest position ever
INTRODUCTION Balance Sheet is now in its strongest position ever Net Debt/EBITDA Receivables/Net Debt Net Debt/Equity Bank Debt (EGP MN) Bank Debt/EBITDA Receivables (EGP MN) Receivables/Bank Debt Equity (EGP MN) Bank Debt/Equity 8.49 6.39 0.37 0.38 1,481 7,193 6,230 5.56 0.27 1,189 1,125 5,354 4.36
Slide 9: Steady focus on Construction Spending
INTRODUCTION Steady focus on Construction Spending, reaching c.EGP1.3 bn in 9M2015, and expected to record EGP2 bn by year end Construction Progress (Percentage Completed) Unit Deliveries 981 1,033 2012 2013 2014 9M’15 268 282 582 27% 138 322 43% 38% 322 124 57% 49% 51% 73% 62% 190 65 561 148 443 26
Slide 10: Building on Success
Building on Success
Slide 11: Clear 4-Pillar Growth Strategy
BUILDING ON SUCCESS Clear 4-Pillar Growth Strategy 1 Growth 2 Earnings’ Stabilization & Diversification Target Land Parcels ♦ PHD has set-up Palm Hills Investments in 2015 to focus on its commercial # 1 2 3 4 5 6 real estate strategy by deploying existing raw land and pipeline projects Location 6th
Slide 12: 1- Growth
Building on Success 1- GROWTH
Slide 13: PHD raised EGP 1.65 billion via capital increase
BUILDING ON SUCCESS - GROWTH PHD successfully raised EGP 1.65 billion via a capital increase in 1H2015, with 85% of proceeds targeted towards growth Strategy Transition to Co-Development of Integrated Communities with Residential & Commercial Offerings ♦ PHD’s development approach during the next gr
Slide 14: Co-Development of the Feddan Project
BUILDING ON SUCCESS - GROWTH Co-Development of the 500 Feddan Project Project Overview ♦ PHD signed the final agreement with the Egyptian Ministry of Housing for the co-development of an integrated community spreading over 2.1 mn sqm in East Cairo. ♦ The project is an integrated community with a com
Slide 15: Co-Development of the Feddan Project (Cont'd)
BUILDING ON SUCCESS - GROWTH Co-Development of the 500 Feddan Project (Cont’d) Detailed Project Components Project Schedule Apartment Building Construction Schedule BUA (sqm) 1,144,000 Year Year Year Year Year Year Year Year Year Year Year 1 2 3 4 5 6 7 8 9 10 11 No. of Units 5,720 5% 9% 11% 11% 11%
Slide 16: Co-Development Project with MNHD
BUILDING ON SUCCESS – GROWTH Co-Development Project with MNHD – Pre-Sales launched in 4Q2015 Project Overview Project Location ♦ PHD signed an agreement with Medinet Nasr Housing & Development (MNHD) for the co-development of a 103 feddan land plot in East Cairo into an integrated mixed used project
Slide 17: Co-Development Project with REACAP/SVREICO
BUILDING ON SUCCESS – GROWTH Co-Development Project with REACAP/SVREICO, with pre-sales planned for 1Q2016 Project Overview Project Location ♦ In cooperation with REACAP/SVREICO, PHD is planning to co-develop 100k sqm inside Smart Village, with a total footprint of 10k sqm. The project is expected t
Slide 18: Internally Funded Residential Projects
BUILDING ON SUCCESS – GROWTH Internally Funded Residential Projects Enhancing Existing Projects Hacienda Bay Extension Palm Valley (Formerly VGO) PK2 Triangle ♦ Capitalizing on the success of its Hacienda Bay project ♦ Located directly on 26 July highway, and at the door ♦ PHD is currently finalizin
Slide 19: Internally Funded Residential Projects (Cont'd)
BUILDING ON SUCCESS – GROWTH Internally Funded Residential Projects (Cont’d) Potential New Projects in North Coast 112 Feddan 500 Feddan ♦ An attractive land plot of 112 feddan in Ras El Hekma, with 446 ♦ Co-development 500 feddan land plot in Ras El Hekma, with 1600 Description meter of beachfront.
Slide 20: Co-Development of the 10,000 Feddan Community
BUILDING ON SUCCESS - GROWTH Co-Development of the 10,000 Feddan Integrated Mixed Use Community Project Overview PHD’s Role as Master Developer ♦ PHD and Aabar Investments jointly signed an MOU with the Ministry of Housing for the development of a comprehensive community on the edge of 6th of Octobe
Slide 21: Consortium of Advisors for the Master Plan
BUILDING ON SUCCESS - GROWTH Co-Development of the 10,000 Feddan Integrated Mixed Use Community (Cont’d) PHD Appointed a Word Class Consortium of Advisors to design the Master Plan 1 Financial Advisor 2 Engineering Consultant 3 Planning and Building Consultant France ♦ ♦ ♦ Over 50 years of interna
Slide 22: 2- Earnings Stabilization & Diversification
Building on Success 2- EARNINGS STABILIZATION & DIVERSIFICATION
Slide 23: Strong plans to grow the Commercial Sector
BUILDING ON SUCCESS - EARNINGS’ STABILIZATION & DIVERSIFICATION Strong plans to grow the Commercial Sector Commercial Segment Overview ♦ PHD has set up Palm Hills Investments (PHI) to focus on developing its commercial strategy as it embarks on a commercial strategy whose primary goal is minimizing
Slide 24: Retail projects details
BUILDING ON SUCCESS - EARNINGS’ STABILIZATION & DIVERSIFICATION Retail projects details Neighborhood Malls Community Malls Kattameya Mall Village Gate Street 88 ♦ A fully integrated commercial facility ♦ A commercial mall is planned in Village ♦ Street 88 will be a c.5,400 GLA located in-between Pal
Slide 25: Office space and leisure facilities details
BUILDING ON SUCCESS - EARNINGS’ STABILIZATION & DIVERSIFICATION Office space and leisure facilities details Office Buildings Leisure Phase 8 Office Building Palm October Club Description ♦ An office building is planned in Phase 8 of PHD’s Sixth of October ♦ PHD is looking to expand its Palm October
Slide 26: 3- Improving Profitability
Building on Success 3- IMPROVING PROFITABILITY
Slide 27: Enhancing and creating further shareholder value
BUILDING ON SUCCESS - IMPROVING PROFITABILITY Enhancing and creating further shareholder value Revenue Sharing Cost Management Divestment of Non-Core Land Bank ♦ Merits: ♦ PHD adapts adequate construction cost per sqm of BUA, ♦ PHD is exiting untapped real estate investments and Lower initial cash
Slide 28: 4- Expediting Project Delivery
Building on Success 4- EXPEDITING PROJECT DELIVERY
Slide 29: Accelerated Construction Program to speed up unit deliveries
BUILDING ON SUCCESS - EXPEDITING PROJECT DELIVERY Implementing an accelerated Construction Program to speed-up Unit Deliveries Construction Progress (% Complete) Unit Deliveries 981 1033 2012 2013 2014 9M’15 268 282 582 27% 138 322 43% 38% 322 124 57% 49% 51% 73% 62% 190 65 561 148 443 268 109 2012
Slide 30: Competitive Landscape
Competitive Landscape
Slide 31: Strong 9M2015 financial results, with healthy margins
COMPETITIVE LANDSCAPE Strong 9M2015 financial results, with healthy margins Total Revenue (EGP MN) Gross Profit (EGP MN) EBITDA (EGP MN) 3,654 757 1,103 960 673 54% 843 48% 582 2,603 2,149 27% 40% 37% 26% 39% 525 21% 1,510 20% 30% 35% 358 890 192 174 219 153 404 10% TMGH AMER MNHD SODIC EMFD PHDC TM
Slide 32: PHD trading at attractive multiples with potential re-rating
COMPETITIVE LANDSCAPE PHD is trading at attractive multiples with a potential re-rating Market Capitalization / Sqm of Land (EGP) (1) Price to Earnings (P/E) (1) (2) 669 33.9 629 22.3 422 324 16.5 234 251 9.0 10.4 4.1 (3) TMGH AMER MNHD SODIC EMFD PHDC TMGH AMER MNHD SODIC EMFD PHDC Price to Book Va
Slide 33: Strong balance sheet backed by EGP7.2 billion receivables
COMPETITIVE LANDSCAPE Strong balance sheet backed by EGP7.2 billion in receivables Net Cash (Net Debt) / Equity Receivables / Net Cash (Net Debt) Equity "EGP MN" Net Cash (Net Debt)/Equity Receivables "EGP MN" Receivables/Net Cash (Net Debt) 26,598 0.11 14,261 29.88 0.04 0.03 7,193 (0.13) 6,028 (0.3
Slide 34: Financial Statements
Financial Statements
Slide 35: Income Statement
FINANCIAL STATEMENTS Income Statement1 EGP 000 9M2015 9M2014 Change Revenue2 2,603,315 1,328,562 96% Cost of revenue (1,643,427) (834,631) 97% Gross profit 959,889 493,930 94% Margin % 36.9% 37.2% (0.3 pp) General administrative, selling and marketing expenses (318,189) (178,905) 78% Other revenue 3
Slide 36: Balance Sheet
FINANCIAL STATEMENTS Balance Sheet1 EGP '000 Sept. 30, 2015 Dec 31, 2014 EGP '000 Sept. 30, 2015 Dec 31, 2014 Long-Term Assets Current Liabilities (Continued) 77,987 Due to Related Parties 233,532 646,313 Investments in Associates 77,163 854,665 Investment Purchase Liabilities 44,257 44,257 Investme
Slide 37: Cash Flow Statement
FINANCIAL STATEMENTS Cash Flow Statement1 EGP '000 Sept. 30, 2015 Sept. 30, 2014 EGP '000 Sept. 30, 2015 Sept. 30, 2014 Net Profit for the period (before income tax & non-controlling 879,512 Change In Notes Payable (513,403) (309,447) 290,202 interest) Change In Suppliers & Contractors 80,523 158,65
Slide 38: Appendix
Appendix
Slide 39: A Strong Brand Name
APPENDIX A Strong Brand Name ♦ Al Ethadia established to serve as the investment vehicle for the Palm ♦ Invested over EGP 1 billion to Hills October residential expedite construction progress ♦ PHD appoints SWA Group to development in West Cairo ♦ Ripplewood acquired a 2.3% stake prepare the master
Slide 40: Continuous support from principal shareholders
APPENDIX PHD enjoys continuous support from its principal shareholders Founding Shareholders Offering Continuous support New Investors: Affirming confidence in the company El Mansour & El Maghraby Investment & Development Company ♦ In 2014, prominent investors, Ripplewood Advisors and Aabar Investme
Slide 41: Key Investment Highlights
APPENDIX Key Investment Highlights ♦ PHD possesses a renowned brand name that is synonymous with excellent product quality with 12 active projects Well Recognized Brand Name ♦ As of 3Q2015, PHD has delivered 3,779 units ♦ Today, PHD’s communities are home to more than 1,400 families ♦ PHD owns a div
Slide 42: Key Investment Highlights (Cont'd)
APPENDIX Key Investment Highlights (Cont’d) ♦ PHD efficiently utilized the proceeds from the 2013 rights issue along with its internal cash flows to spend EGP1.1 bn on its construction program during 2014, while construction spending reached EGP1.3 bn as at 9M2015. Successful Turnaround ♦ PHD’s gros
Slide 43: PHD is led by a strong team
APPENDIX PHD is led by a strong team Board of Directors Executive Management Board Member Position Yasseen Mr. Yasseen Mansour serves as Chairman of the Board of Directors of PHD, and has guided the Mansour company from a single-project entity into a leading real estate player in Egypt. Mansour bega
Slide 44: Egypt Political & Macroeconomic Update
APPENDIX Egypt Political & Macroeconomic Update Constitutional Presidential Subsidy Reforms Egypt Economic Development Parliamentary Roadmap Political Referendum Elections Implementation Conference Elections January 2014 May 2014 July 2014 March 2015 4Q 2015 Subsidy Reforms Mortgage Financ
Slide 45: Healthy Demographics
APPENDIX Healthy Demographics Population in 2014e & 2014 Growth (mn, %) Young Population Increasing Annual Marriages (‘000) 85 Male Female 898 922 9.4% 865 90-99 759 80-89 70-79 60-69 39 50-59 33 31 40-49 3.0% 2.3% 30-39 2.0% 2.1% 2.1% 20-29 1.0% 11 9 7 10-19 2 1.0% 0-9 -30% -20% -10% 0% 10% 20% 30%
Slide 46: Real Estate Market Dynamics
APPENDIX Real Estate Market Dynamics Overview Latest Developments (3Q 2015) ♦ Densely populated urban centers with low urbanization ≡ The New Urban Communities Authority (“NUCA”) sold three land plots spreading over 270 feddan (1.13 million sqm) worth EGP3.7 bn in New Cairo through a public auction;
Slide 47: Commercial Market Overview
APPENDIX Commercial Market Overview Sizeable & Growing Population Improving Macroeconomic & Political Profile Rising Real Estate Gross Sales 85 Real GDP Growth Gross Sales (EGP mn) 3,7353,764 3.8% 3.9% 3,202 9.4% 3.5% 2,814 3,105 3,188 2.2% 2.1% 2.2% 2,083 1.8% 1,4661,510 1,7931,771 1,452 1,784 967
Slide 48: Commercial Market Overview - Retail Market
APPENDIX Commercial Market Overview - Retail Market Sector Overview Market Snapshot Underpenetrated Market with Ample Headroom Global Residential Prices USD/sqm vs. USD 18,000 GDP/capita(3) ♦ Cairo ranks amongst the lowest in retail space / capital when Smart 3 16,000 Moscow London New York Village
Slide 49: Commercial Market Overview - Offices & Hospitality
APPENDIX Commercial Market Overview - Offices & Hospitality Office Scarcity of Business Parks Rising Future Supply Cairo’s GLA Evolution ('000 sqm)(1) ♦ The scarcity of business parks and lack of Grade A office space in Cairo’s core make it difficult for corporations to find suitable office space to
Slide 50: Projects' Portfolio - West Cairo
APPENDIX Projects’ Portfolio - West Cairo Palm Valley Total Land Area 236,376 sqm Palm Hills October Sellable Land Area 110,130 sqm Total Land Area 1,827,380 sqm Sellable Built Up Area 107,627 m2 Sellable Land Area 236,951 sqm Unit Types Standalone units Sellable Built Up Area 209,641 sqm Unit Inven
Slide 51: Projects' Portfolio - East Cairo
APPENDIX Projects’ Portfolio - East Cairo Palm Katameya Extension The Village Avenue Total Land Area 275,100 sqm Total Land Area 34,906 sqm Sellable Land Area 114,098 sqm Sellable Land Area NA Sellable Built Up Area 115,391 sqm Sellable Built Up Area 29,326 sqm Unit Types Standalone Unit Types Apart
Slide 52: Projects' Portfolio - North Coast
APPENDIX Projects’ Portfolio - North Coast Hacienda Bay Total Land Area 2,306,33 sqm Sellable Land Area 430,676 sqm Sellable Built Up Area 603,264 sqm Unit Types Standalone, Apts. Unit Inventory 2,021 / EGP5.0 bn Hacienda White 1 Units Sold 1,434 / EGP2.5 bn Total Land Area 215,023 sqm Construction
Slide 53: Corporate Structure
APPENDIX Corporate Structure Palm Hills Development Golf Palm Hills Botanica Bamboo Cascade Golden Palm Woodville Golf Views SAE Extension Katameya New East Cairo for Palm Hills Middle New Cairo for Real Estate Saudi Urban Palm Hills for Macor for Securities Real Estate East Co. for Real Estate Deve
Slide 54: Investor Relations Contacts
APPENDIX Investor Relations Contacts Mamdouh Abdelwahab Investor.relations@phdint.com Corporate Head-Quarters Address Investor Relations & Investments Director Direct: +202 35351200 Smart Village, A4 – B84 Ahmed Nour El-Din Hassan Kilo 28, Cairo/Alexandria Desert Road Extension: 1230 / 1503 Abou Raw
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