TECOM Group PJSC · DFM:TECOM
TECOM Group PJSC — Q1 2024 Earnings Presentation
41 slides from TECOM Group PJSC's earnings presentation, May 2024
Slide 1: Investor Presentation Q1 2024 Financial Results
Classification: Public INVESTOR PRESENTATION Q1 2024 FINANCIAL RESULTS MAY 2024
Slide 2: Disclaimer
Classification: Public MAY 2024 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 obtain
Slide 3: TECOM Group Management Presenting
Classification: Public MAY 2024 TECOM GROUP MANAGEMENT PRESENTING ABDULLA BELHOUL MICHAEL WUNDERBALDINGER CEO OF TECOM GROUP CFO OF TECOM GROUP 3 03
Slide 4: Content
Classification: Public MAY 2024 CONTENT MACROECONOMIC AND REAL ESTATE MARKET HIGHLIGHTS 5-8 TECOM GROUP’S VALUE PROPOSITION 9-13 Q1 2024 OPERATIONAL & FINANCIAL PERFORMANCE HIGHLIGHTS 14-23 NEW DEVELOPMENT UPDATE 24-25 BUSINESS SEGMENTS PERFORMANCE 26-30 SUSTAINABILITY AND ESG 31-35 ACHIEVEMENTS & O
Slide 5: Macroeconomic and Real Estate Market Highlights
Classification: Public MACROECONOMIC AND REAL ESTATE MARKET HIGHLIGHTS
Slide 6: Dubai Continues to Attract Businesses, Spurring Economic Growth
Classification: Public MAY 2024 DUBAI’S CONTINUES TO ATTRACT BUSINESSES, SPURRING ECONOMIC GROWTH ALL KEY NON OIL SECTORS STARTED THE YEAR ON A BUSINESS CONDITIONS REMAIN BUOYANT IN 2024 STRONG NOTE • In February, S&P Global PMI survey for Dubai reached 58.5, strongest reading since May 2019. Travel
Slide 7: Demand for Commercial Properties Sustains Strong Momentum from 2023
Classification: Public MAY 2024 DEMAND FOR COMMERCIAL PROPERTIES SUSTAINS STRONG MOMENTUM FROM 2023 SUSTAINED INCRESAE IN DEMAND FOR COMMERCIAL REAL DUBAI OFFICE RENTS, YoY % CHANGE TO Q4 2023 ESTATE SUPPORTS HIGHER OCCUPANCY AND LEASE RATES • Given the current supportive market fundamentals, averag
Slide 8: Supply and Demand Imbalance Supports Rental Growth in Industrial and Logistics
Classification: Public MAY 2024 SUPPLY AND DEMAND IMBALANCE SUPPORTS RENTAL GROWTH IN INDUSTRIAL AND LOGISTICS SEGMENT DEMAND CONTINUES TO DRIVE RENTAL RATES WHILE LIMITED TECOM HOUSE VIEW SUPPLY PROVIDES OPPORTUNITIES FOR LANDOWNERS • The manufacturing sector is one of the most prominent sectors dr
Slide 9: TECOM Group's Value Proposition
Classification: Public TECOM GROUP’S VALUE PROPOSITION
Slide 10: A Compelling Investment Opportunity
Classification: Public MAY 2024 A COMPELLING INVESTMENT OPPORTUNITY Over 20 years 11,000+ Dividend payout 6 strategic sectors Of experience as Leading player long-term, loyal and Supported by robust and primed for sustainable in Dubai’s business hub diversified customer base attractive financial pro
Slide 11: 10 Business Districts Strategically Located
Classification: Public MAY 2024 Dubai’s strategic business enabler 10 BUSINESS DISTRICTS and creator of world’s class business districts STRATEGICALLY LOCATED 11 12
Slide 12: Delivering Value Through Our Business Segments
Classification: Public MAY 2024 DELIVERING VALUE THROUGH OUR 4 BUSINESS SEGMENTS COMMERCIAL INDUSTRIAL LAND SERVICES LEASING LEASING LEASING & OTHERS • Government services • Registration and licensing 9.5 11.5 • Corporate services 164 Incubation services Million sqft Million sqft Million sqft for st
Slide 13: Unlocking Sustainable Growth Through Clearly Defined Objectives
Classification: Public MAY 2024 UNLOCKING SUSTAINABLE GROWTH THROUGH CLEARLY DEFINED OBJECTIVES STRATEGIC PILLARS OPTIMISE CORE BUSINESS DEVELOP BUILD NEW SOURCES & PERFORMANCE DIFFERENTIATED OF GROWTH VALUE PROPOSITION - Retain and strengthen relationships with customers - Deliver a compelling valu
Slide 14: Q1 2024 Operational & Financial Performance Highlights
Classification: Public Q1 2024 OPERATIONAL & FINANCIAL PERFORMANCE HIGHLIGHTS
Slide 15: Financial Highlights (Q1 2024)
MAY 2024 FINANCIAL HIGHLIGHTS (Q1 2024) OPERATING PERFORMANCE 91% Consolidated Occupancy (Excluding Land Leasing) 2.4 Years REVENUE EBITDA FFO1 Overall blended WALT* (Weighted of Commercial AED 564 MN AED 439 MN AED 413 MN [BTS & BTL] and Industrial) vs. 2023 10% vs. 2023 10% vs. 2023 15% *WALT: Wei
Slide 16: Strong Cash Flow Generation & Increase in Growth Capex
Classification: Public MAY 2024 STRONG CASH FLOW GENERATION & INCREASE IN GROWTH CAPEX 1,6 00 1,4 00 1,2 00 1,447 1,500 o Good collections and robust 1,0 00 800 1,009 1,198 business performance 600 400 359 413 supported FFO increase. FUNDS FROM 200 OPERATIONS (FFO)1 0 2021 2022 2023 LTM Mar-24 Q1 A2
Slide 17: Balance Sheet
Classification: Public MAY 2024 BALANCE SHEET 31 MAR 31 DEC YoY DESCRIPTION 2024 2023 CHANGE % PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS 110 114 -3% INVESTMENT PROPERTY 11,854 11,865 0% DERIVATIVE FINANCIAL INSTRUMENTS 245 222 10% TRADE, UNBILLED AND FINANCE LEASE RECEIVABLES 814 816 0% NON-CURRENT
Slide 18: Income Statement
Classification: Public MAY 2024 INCOME STATEMENT 31 MAR 31 MAR YoY DESCRIPTION 2024 2023 CHANGE % REVENUE 564 514 10% DIRECT COSTS (185) (171) 8% GROSS PROFIT 379 343 11% OTHER OPERATING INCOME 13 10 32% 392 353 11% GENERAL AND ADMINISTRATIVE (45) (45) - MARKETING AND SELLING (9) (7) 35% OTHER OPERA
Slide 19: Robust Financial Standing, Healthy Leverage Position
Classification: Public MAY 2024 ROBUST FINANCIAL STANDING, HEALTHY LEVERAGE POSITION CAPITAL STRUCTURE o Prudent management of BALANCE SHEET AED MN AMOUNT LTV1 NET DEBT / LTM2 EBITDA capital structure supporting DEBT 4,355 AED 7.6BN CORPORATE FACILITY 4,355 our day-to-day business CASH 1,424 EQUITY
Slide 20: Portfolio Valuation
Classification: Public MAY 2024 PORTFOLIO VALUATION Strong appreciation in portfolio value driven by robust economic growth, increase in Dubai’s commercial property prices and rental income, high occupancy rates across our assets OUR PORTFOLIO 165MN 1,128 WAREHOUSES SQ. FT. LAND AREA 147 22.9BN COMM
Slide 21: EPRA KPIs
Classification: Public MAY 2024 EPRA KPIs KPI Q1 2024 2023 Q1 2023 2022 2021 2020 2019 IFRS EARNINGS (AED Million) 293 1,078 255 726 569 579 634 EPRA EARNINGS (AED Million) 391 1,502 348 1,024 898 944 984 IFRS NET ASSETS (AED Million) 6,427 6,329 5,981 5,968 5,613 6,168 6,131 EPRA NET ASSET VALUE (N
Slide 22: Analyst Coverage Report
Classification: Public MAY 2024 MAY 2024 ANALYST COVERAGE REPORT DATE 3rd May 2024 3rd May 2024 3rd May 2024 20th March 2024 1st February 2024 19th OCTOBER 2023 31st January 2024 30th DECEMBER 2023 31st January 2024 RATING BUY EQUAL-WEIGHT BUY OVER-WEIGHT BUY BUY BUY BUY BUY ANALYST HARSH MEHTA NIDA
Slide 23: Dividend Policy
Classification: Public MAY 2024 DIVIDEND POLICY • In June 2022 we announced our dividend policy: • Semi-annual dividend pay-outs adding to AED 800 million FY 2023 FY 2024 H1 2025 per annum were committed. • AED 400 million dividend paid for second half of 2022 in two payments of AED 200 million each
Slide 24: New Development Update
Classification: Public NEW DEVELOPMENT UPDATE
Slide 25: New Development Update: Dubai Science Park
Classification: Public MAY 2024 NEW DEVELOPMENT UPDATE P RO J ECT RATIO NALE DEVELOPMENT – DUBAI SCIENCE PARK (DSP) • Existing warehouses in DSP are operating at PROJECT KEY HIGHLIGHTS PROJECT LOCATION full occupancy (100% as of Mar 2024) over the last few years • DSP’s location is PLOT AREA GFA BUA
Slide 26: Business Segments Performance
Classification: Public BUSINESS SEGMENTS PERFORMANCE
Slide 27: Commercial Leasing Segment
Classification: Public MAY 2024 COMMERCIAL LEASING SEGMENT STRONG PERFORMANCE SUPPORTED BY STABLE DEMAND AND INCREASING RENTAL RATES Q1 % CHANGE DESCRIPTION 2024 2023 YOY • Revenue growth driven by new leases and increase in average REVENUE 296 275 8% rates. • EBITDA margins remained stable, reflect
Slide 28: Industrial Leasing Segment
Classification: Public MAY 2024 INDUSTRIAL LEASING SEGMENT INCREASE IN OCCUPANCY RATES DRIVEN BY STRONG RETENTION RATES BOOSTED THIS SEGMENT’S PERFROMANCE, AS SUPPLY FOR THIS PROPERTY TYPE REMAINED LIMITED Q1 % CHANGE DESCRIPTION 2024 2023 YOY • Record occupancy levels in warehouses and good occupan
Slide 29: Land Leasing Segment
Classification: Public MAY 2024 LAND LEASING SEGMENT Favorable market conditions and supportive business environment boosted demand for land, especially for industrial use, pushing occupancy rates to 95% Q1 % CHANGE DESCRIPTION 2024 2023 YOY • TECOM’s portfolio of well-connected, infrastructure enab
Slide 30: Services & Others Segment
Classification: Public MAY 2024 SERVICES & OTHERS SEGMENT SOLID PERFORMANCE AS DUBAI’S APPEAL FOR TALENT AND IMPROVING BUSINESS CONDITIONS CONTINUE TO DRIVE AN INCREASE IN THE NUMBER OF EMPLOYEES Q1 % CHANGE DESCRIPTION 2024 2023 YOY • Increase in number of new visa transactions and growing REVENUE
Slide 31: Sustainability and ESG
Classification: Public SUSTAINABILITY AND ESG
Slide 32: Environment & Sustainability Goals
Classification: Public MAY 2024 ENVIRONMENT & SUSTAINABILITY GOALS National/International OUR CORE PILLARS Mandates • Ethical business policies & practices Governance and • Robust governance UAE Centennial 2071 Stabilise core Risk • Prudent risk management business • Responsible sourcing and procure
Slide 33: Key ESG Highlights and Achievements of Q1 2024
Classification: Public MAY 2024 KEY ESG HIGHLIGHTS AND ACHIEVEMENTS OF Q1 2024 Economy 388 87.4% AED 293M Active Start-ups (2.10% up from Q4 2023) Customer Experience (CX) Index, adopted in 2023. Net profit for Q1 2024 Including: Previously we measured Customer Satisfaction only. (+15% increase comp
Slide 34: Key ESG Highlights and Achievements of Q1 2024 - Cont'd
Classification: Public MAY 2024 KEY ESG HIGHLIGHTS AND ACHIEVEMENTS OF Q1 2024 - CONT’D People 24% 1/3 0 of our employees Work-related injuries or Emiratisation Rate are female fatalities since 2019 Environment 4 LEED PLATINUM certified 2.98 GWh 32 (+2 in Q1 2024) Clean Energy Generation LEED certif
Slide 35: Key ESG Highlights and Achievements of Q1 2024 - Cont'd
Classification: Public MAY 2024 KEY ESG HIGHLIGHTS AND ACHIEVEMENTS OF Q1 2024 - CONT’D Emirates Red Crescent and TECOM Group PJSC have reintroduced The Good Store, a philanthropic initiative to provide a seamless donation platform during Ramadan and Eid al-Fitr, for the second consecutive year. • T
Slide 36: Achievements & Outlook
Classification: Public ACHIEVEMENTS & OUTLOOK
Slide 37: Achievements FY2023
Classification: Public MAY 2024 ACHIEVEMENTS FY2023 REVENUE EBITDA EBITDA NET PROFIT FFO OCCUPANCY MARGIN End of Period ~85% COMMERCIAL LEASING TARGETS AED 1,900 MN AED 1,266 MN 66% AED 558 MN AED 969 MN (IPO FINANCIAL GUIDANCE) ~80% INDUSTRIAL LEASING 89% COMMERCIAL LEASING AED 2,169 MN AED 1,654 M
Slide 38: Priorities for 2024 & Beyond
Classification: Public MAY 2024 PRIORITIES FOR 2024 & BEYOND OPTIMISE CORE BUSINESS DEVELOP DIFFERENTIATED BUILD NEW SOURCES & PERFORMANCE VALUE PROPOSITION OF GROWTH Identify customer priorities and Enhance and integrate customer Identify novel, differentiated retention initiatives journeys through
Slide 39: Growth Drivers
Classification: Public MAY 2024 GROWTH DRIVERS 01. 02. 03. 04. 05. Occupancy Rental Completed Growth Complementary Rates Rates Projects Projects Services Occupancy rates Rental rates growth Delivery of high- Future organic Growth driven by growth driven by as Dubai office rental quality built-to-sui
Slide 40: Contact Us
Classification: Public FEBRUARY 2024 CONTACT US
Slide 41: Thank You
Classification: Public THANK YOU