Tecom Group Pjsc · DFM:TECOM
Tecom Group Pjsc — Q2 & H1 2022 Earnings Presentation
32 slides from Tecom Group Pjsc's earnings presentation, Aug 3, 2022
Slide 1: Investor Presentation Q2 & H1 2022 Financial Results
INVESTOR PRESENTATION Q2 & H1 2022 FINANCIAL RESULTS
Slide 2: Disclaimer
DISCLAIMER The information contained herein has been prepared by TECOM Group PJSC (“TECOM”) or (the “Company”). The information contained in this presentation may not have been reviewed or reported on by the Company’s auditors. The company relies on information obtained from sources believed to be r
Slide 3: Agenda
AGENDA TECOM Group at a Glance 5 Investment Highlights 6-10 Q2 & H1 2022 Financial Performance Highlights 11-18 Q2 & H1 2022 Business Segment Performance 19-23 Outlook 24-26
Slide 4: TECOM Group Management Presenting
TECOM GROUP MANAGEMENT PRESENTING Abdulla Belhoul Michael Wunderbaldinger CEO of TECOM Group CFO of TECOM Group
Slide 5: TECOM Group at a Glance
TECOM GROUP AT A GLANCE A unique commercial real estate developer and operator of iconic business districts with 20+ years of know how in delivering a diversified real estate service offering at large scale in Dubai OPERATING 10 BUSINESS DISTRICTS WITH 185 Million1 SQFT. OF LEASING SPACE HOME TO 7,8
Slide 6: Offering a Unique Value Proposition to Businesses and Talent Based in Dubai
OFFERING A UNIQUE VALUE PROPOSITION TO BUSINESSES AND TALENT BASED IN DUBAI 30 30 Building sector specific business districts and other critical 30 infrastructure across strategic areas in Dubai 10 Creating unique industry ecosystems, fostering talent, innovation and collaboration Delivering quality
Slide 7: Through a Multi-Dimensional Product and Services Offering
THROUGH A MULTI-DIMENSIONAL PRODUCT AND SERVICES OFFERING COMMERCIAL LEASING INDUSTRIAL LEASING LAND LEASING SERVICES & OTHERS Consists of built to lease (BTL) and Consists of warehouses, showrooms and Consists of land with existing or expected Consists of government and business built to suit (BTS)
Slide 8: Long-Term & Diversified Customer Base
LONG-TERM & DIVERSIFIED CUSTOMER BASE COMMERCIAL PROPERTIES HIGH QUALITY CUSTOMER BASE WITH INDUSTRY-LEADING NAMES 84% 93% TECH MEDIA EDUCATION SCIENCE MANUFACTURING DESIGN CONSOLIDATED AVERAGE VALUE-BASED OCCUPANCY RATE CUSTOMER RETENTION RATE (AS OF 30 JUN 2022) (FOR 10 YEARS ENDED 30 JUN 2022) VS
Slide 9: A Compelling Investment Opportunity
A COMPELLING INVESTMENT OPPORTUNITY Leading player in Dubai’s business hub proposition, Diverse, high quality, and widely spread portfolio strongly positioned to benefit from Dubai’s broader real estate strategically located across Dubai market and macro economic recovery Long-term, loyal and divers
Slide 10: Clear and Actionable Strategy for Growth
CLEAR AND ACTIONABLE STRATEGY FOR GROWTH Tangible roadmap to pursue our growth objectives CAPITALISING ON AMPLE ROOM TO RAMP UP HEALTHY PIPELINE OF ACTIVATING AND ACCESSING FAVOURABLE MARKET OCCUPANCY DE-RISKED BTS PROJECTS ADDITIONAL LAND BANK DYNAMICS Over the medium term aiming to • Current comme
Slide 11: Q2 & H1 2022 Financial Performance Highlights
Q2 & H1 2022 FINANCIAL PERFORMANCE HIGHLIGHTS
Slide 12: Q2 & H1 2022 Key Highlights
Q2 & H1 2022 KEY HIGHLIGHTS Driven by increasing occupancy rates in Strong group performance with double-digit commercial and industrial properties and Underpinned by healthy cash flow, robust growth across all key financial metrics in completed BTS projects, supported by strong balance sheet positi
Slide 13: Group Level Performance Highlights
GROUP LEVEL PERFORMANCE HIGHLIGHTS Financial Performance Operating Performance (as of 30 June 2022) Q2 2022 H1 2022 H1 2022 AED 504 Million AED 373 Million AED 989 Million AED 723 Million 82.2% Revenue EBITDA Revenue EBITDA Consolidated Occupancy (excluding land) 18.5% vs. Q2 2021 25.7% vs. Q2 2021
Slide 14: Key Financial Figures
KEY FINANCIAL FIGURES AED % Change % Change Q2 2022 Q2 2021 H1 2022 H1 2021 (‘000s) YoY YoY Revenue 504,306 425,611 +18.49% 989,417 854,515 15.79% EBITDA 373,423 297,060 +25.71% 722,858 590,396 +22.44% EBITDA 74.05% 69.80% +4.25% 73.06% 69.09% +3.97% Margin Net Profit 237,321 153,929 +54.14% 427,533
Slide 15: Robust Balance Sheet
ROBUST BALANCE SHEET Assets Equity and Liabilities AED (Millions) 30 Jun 22 31 Dec 21 AED (Millions) 30 Jun 22 31 Dec 21 Share capital 500 - Property and equipment 102 108 Legal reserve 172 172 Investment property 11,935 13,368 Hedge reserve 184 7 Retained earnings 4,862 5,434 Intangible assets 27 3
Slide 16: Sound Assets Valuation
SOUND ASSETS VALUATION VALUE OF ASSETS (JLL AS OF MARCH 2022) Fair Values (in AED Billion) 2.0 18.1 1.3 19.4 6.1 10.0 Commercial Leasing Land leases Industrial Leasing* Sub-Total (Operational Available Land Total Assets) *Industrial leasing includes Warehouses and LVs DISCOUNT RATE 9.8% 9.2% 12.3% 9
Slide 17: Sustainable Growth in Cash Flow
SUSTAINABLE GROWTH IN CASH FLOW Fund From Operations (AED ‘000s) LTM Q2- AED (‘000) H1 2022 Q2 2022 1,065,530 1,064,924 1,008,646 1,114,863 2022 1,114,863 627,302 378,196 Funds from Operations (FFO)1 Recurring FCF2 886,950 514,071 338,069 2019 2020 2021 LTM Q2-22 1 Funds from Operations = Cash flow
Slide 18: Efficient Financing Structure and Update on Corporate Financing Facility
EFFICIENT FINANCING STRUCTURE AND UPDATE ON CORPORATE FINANCING FACILITY TECOM Group consolidated and restructured its existing bank facilities through a new facility agreement aggregating to AED 7.6 Billion in March 2022, leading to lower financing costs and increased financial flexibility Debt Pro
Slide 19: Dividend Policy
DIVIDEND POLICY Intends to adopt a semi-annual dividend distribution policy • TECOM intends to pay an annual fixed dividend amount of AED 800 Million for the next 3 years (subject to GA approval) • Intended first interim dividend distribution is to be paid in October 2022 of AED 200 Million and the
Slide 20: Performance by Business Segment Q2 & H1 2022
PERFORMANCE BY BUSINESS SEGMENT Q2 & H1 2022
Slide 21: Commercial Leasing
COMMERCIAL LEASING Continued robust recovery in office and retail supported by strong renewal rates AED % Change % Change Q2 2022 Q2 2021 H1 2022 H1 2021 (‘000s) YoY YoY • Revenue growth driven by new BTS projects, higher occupancy rates at both retail and office properties Revenue 266,891 224,752 +
Slide 22: Industrial Leasing
INDUSTRIAL LEASING Sustained strong performance as segment benefits from structural long-term tailwinds in industrial and logistics sector AED % Change % Change Q2 2022 Q2 2021 H1 2022 H1 2021 (‘000s) YoY YoY • Revenue growth driven higher occupancy rates • Higher EBITDA and improving EBITDA margins
Slide 23: Land Leasing
LAND LEASING Resilient and stable financial performance driven by ultra long-term lease agreements AED % Change % Change Q2 2022 Q2 2021 H1 2022 H1 2021 • Increased revenue driven by higher occupancy and (‘000s) YoY YoY improved business sentiment. Revenue 107,116 103,546 +3.45% 219,291 211,858 +3.5
Slide 24: Services & Others
SERVICES & OTHERS Growing revenue stream generated from complementary services offered in business districts to new and existing tenants/customers AED (‘000s) Q2 2022 Q2 2021 % Change YoY H1 2022 H1 2021 % Change YoY • Strong increase in revenue driven by higher government and registration services
Slide 25: Environment & Sustainability Goals Framework
ENVIRONMENT & SUSTAINABILITY GOALS FRAMEWORK Strategic Our core pillars National/ international objectives mandates • Ethical business policies & practices • Robust governance Governance and Risk • Prudent risk management • Responsible sourcing and procurement UAE Centennial Stabilise core 2071 busi
Slide 26: Investing in Local Communities
INVESTING IN LOCAL COMMUNITIES TECOM Group is an integral part of the communities in which it operates and we are committed to contributing to their long-term sustainability and growth. We enhance the spaces around our buildings and organise community events to ensure we meet needs and create vibran
Slide 27: Outlook
OUTLOOK
Slide 28: Highly Visible Organic Growth Drivers
HIGHLY VISIBLE ORGANIC GROWTH DRIVERS • Occupancy rate (end of period): ~85%(commercial); ~80%(industrial) 2022 Targets • Revenue: ~AED 1,900 Million (~+8% YoY) Occupancy Rates Growth Rental Rates Growth Completed Projects Future Projects Supplementary Services Strong upside from complementary Compl
Slide 29: Appendix
APPENDIX
Slide 30: The UAE and Dubai Governments Continuously Invest in Strategic Sectors
THE UAE AND DUBAI GOVERNMENTS CONTINUOUSLY INVEST IN STRATEGIC SECTORS SERVING AS A CATALYST FOR FURTHER GROWTH
Slide 31: H1 Business Milestones
H1 BUSINESS MILESTONES Wonder Bakery inaugurates D/Quarters, a new a 62,000 sqft. food generation of manufacturing facility at workspace solutions, Dubai Industrial City (March launch in Dubai to drive in5 to launch a dedicated space ’22) for investors to drive investment entrepreneurship and Gabri
Slide 32: Thank You
-— TECOM GROUP a
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