Tecom Group Pjsc · DFM:TECOM
Tecom Group Pjsc — FY2022 Earnings Presentation
38 slides from Tecom Group Pjsc's earnings presentation, February 2023
Slide 1: Investor Presentation Full Year 2022 Financial Results
INVESTOR PRESENTATION FULL YEAR 2022 FINANCIAL RESULTS FEBRUARY 2023
Slide 2: Disclaimer
FEBRUARY 2023 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 be
Slide 3: Agenda
FEBRUARY 2023 AGENDA Macroeconomic and Real Estate Market Highlights 5-9 TECOM Group’s Value Proposition 10-14 Full Year 2022 Operational & Financial Performance Highlights 15-25 Business Districts Performance 26-30 Sustainability and ESG 31-34 Outlook 35-37
Slide 4: TECOM Group Management Presenting
FEBRUARY 2023 TECOM GROUP MANAGEMENT PRESENTING ABDULLA BELHOUL MICHAEL WUNDERBALDINGER CEO OF TECOM GROUP CFO OF TECOM GROUP 04
Slide 5: Macroeconomic and Real Estate Market Highlights
MACROECONOMIC AND REAL ESTATE MARKET HIGHLIGHTS
Slide 6: Macroeconomic Highlights
FEBRUARY 2023 MACROECONOMIC HIGHLIGHTS UAE set to report strongest GDP Tourism, logistics, Real Estate & Industrial Oil & Gas and driving economic growth in a decade with relatively mild segments significant contributors to non- growth inflation oil economic expansion • UAE Central Bank (CBUAE) expe
Slide 7: Commercial Real Estate - Demand Trends
FEBRUARY 2023 COMMERCIAL REAL ESTATE - DEMAND TRENDS Strong demand for commercial space Government reforms and initiatives Commercial sales transactions spurred by boom in private sector stimulated foreign investment Overview & Outlook growth • 2022 was a fantastic year for commercial • Rise in inte
Slide 8: Dubai – Offices Market Highlights
FEBRUARY 2023 DUBAI – OFFICES MARKET HIGHLIGHTS Dubai Offices, Average Occupancy Rate, % Strong demand for quality office space Resurgence in rental rates supports occupancy rates to pre-pandemic levels • In 2022, total Ejari contracts registered was up • Dubai’s office rents are 46.1% YoY and the n
Slide 9: Dubai – Industrial & Warehouses Highlights
FEBRUARY 2023 DUBAI – INDUSTRIAL & WAREHOUSES HIGHLIGHTS Solid demand for industrial and warehouses underpinned by Industrial & Logistics Demand By Sector - Dubai 2022 strong growth in the industrial and manufacturing segment Banking & Finance Business Services Creative & Media Public Sector Health
Slide 10: TECOM Group's Value Proposition
TECOM GROUP’S VALUE PROPOSITION
Slide 11: A Compelling Investment Opportunity
FEBRUARY 2023 A COMPELLING INVESTMENT OPPORTUNITY Over 20 years 9,500+ 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 profile growth proposi
Slide 12: 10 Business Districts Strategically Located
FEBRUARY 2023 10 BUSINESS DISTRICTS Dubai’s strategic business enabler and creator of world’s class business districts STRATEGICALLY LOCATED 12
Slide 13: Delivering Value Through Our Business Segments
FEBRUARY 2023 DELIVERING VALUE THROUGH OUR 4 BUSINESS SEGMENTS COMMERCIAL INDUSTRIAL LAND SERVICES LEASING LEASING LEASING & OTHERS • Government services • Registration and licensing 9.5 • Corporate services 11.5 164 Million sqft Million sqft Million sqft Incubation services for start-ups GLA (as of
Slide 14: Clearly Defined Growth Strategy Anchored on Three Core Pillars
FEBRUARY 2023 CLEARLY DEFINED GROWTH STRATEGY ANCHORED ON THREE CORE PILLARS STRATEGIC PILLARS OPTIMISE CORE BUSINESS DEVELOP BUILD NEW SOURCES & PERFORMANCE DIFFERENTIATED OF GROWTH VALUE PROPOSITION - Retain and strengthen relationships with customers - Deliver a compelling value proposition - Dri
Slide 15: Full Year 2022 Operational & Financial Performance Highlights
FULL YEAR 2022 OPERATIONAL & FINANCIAL PERFORMANCE HIGHLIGHTS
Slide 16: FY 2022 Key Highlights
FEBRUARY 2023 FY 2022 KEY HIGHLIGHTS SINCE OUR SUCCESSFUL IPO IN JULY 2022, TECOM GROUP HAS MORE THAN DELIVERED ON ITS PROMISES, DEMONSTRATING STRONG ORGANIC GROWTH AND REWARDING SHAREHOLDERS WITH ATTRACTIVE RETURNS Highest revenue on record High occupancy rate at 86% Highest number of customers Str
Slide 17: Financial Highlights (Full Year)
FEBRUARY 2023 FINANCIAL HIGHLIGHTS (FULL YEAR) OPERATING PERFORMANCE 86.0% Consolidated Occupancy (Excluding Land Leasing) REVENUE EBITDA FFO1 2.8 Years Overall blended WALT* AED 1,973 MN AED 1,347 MN AED 1,198 MN (Weighted of Commercial [BTS & BTL] and Industrial) vs. 2021 12% vs. 2021 15% vs. 2021
Slide 18: Strong Cash Flow Generation & Increase in Growth CAPEX
FEBRUARY 2023 STRONG CASH FLOW GENERATION & INCREASE IN GROWTH CAPEX 1,198 1,066 1,065 1,009 • Sustained growth in FFO and FUNDS FROM RCFC, driven by improving OPERATIONS (FFO)1 business conditions, quality of 2019 2020 2021 2022 tenants • Well-balanced portfolio of assets 1,2 00 1,0 00 964 with bot
Slide 19: Robust Balance Sheet
FEBRUARY 2023 ROBUST BALANCE SHEET 31 DEC 31 DEC YoY DESCRIPTION 2022 2021 CHANGE % PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS 116 143 -19% INVESTMENT PROPERTY 11,874 13,368 -11% DERIVATIVE FINANCIAL INSTRUMENTS 316 73 -332% TRADE, UNBILLED AND FINANCE LEASE RECEIVABLES 743 744 0% NON-CURRENT ASSETS
Slide 20: Income Statement
FEBRUARY 2023 INCOME STATEMENT 31 DEC 31 DEC YoY DESCRIPTION 2022 2021 CHANGE % REVENUE 1,973 1,766 12% DIRECT COSTS (768) (731) -8% GROSS PROFIT 1,205 1,035 16% OTHER OPERATING INCOME 42 50 -16% 1,247 1,084 15% GENERAL AND ADMINISTRATIVE (245) (255) 4% MARKETING AND SELLING (42) (33) -27% TOTAL EXP
Slide 21: Healthy Leverage Position Supporting Growth Agenda
FEBRUARY 2023 HEALTHY LEVERAGE POSITION SUPPORTING GROWTH AGENDA • Robust balance sheet with investment BALANCE SHEET CAPITAL STRUCTURE properties valued at AED 21.3Bn, a 9.7% increase compared to previous valuation of AED MN AMOUNT LTV1 LTMEBITDA DEBT AED 7.6BN CORPORATE FACILITY 4,342 20.4% 19.4Bn
Slide 22: Portfolio Valuation
FEBRUARY 2023 PORTFOLIO VALUATION Robust growth in portfolio value due to improving economic conditions, completion of value accretive BTS projects and high-quality tenants contracted over the long term OUR PORTFOLIO 165MN 21.1MN SQ. FT. SQ. FT. LAND AREA LEASABLE AREA 21.3BN 1,128 147 81 VALUATION
Slide 23: EPRA KPIs
FEBRUARY 2023 EPRA KPIs KPI 2022 Q3 2022 H1 2022 Q1 2022 2021 2020 2019 IFRS EARNINGS 726 639 428 190 569 579 634 EPRA EARNINGS 1,024 832 534 225 898 944 984 IFRS NET ASSETS 5,968 6,070 5,718 6,264 5,613 6,168 6,131 EPRA NET ASSET VALUE (NAV) 15,052 13,240 13,006 13,621 11,359 12,035 12,705 EPRA NIY
Slide 24: Analyst Coverage Report
FEBRUARY 2023 ANALYST COVERAGE REPORT 7TH AUG 2022 29TH OCT 2022 8TH AUG 2022 26TH OCT 2022 8TH AUG 2022 26TH OCT 2022 10TH FEB 2023 10TH FEB 2023 10TH FEB 2023 RATING BUY EQUAL-WEIGHT BUY ANALYST HARSH MEHTA NIDA IQBAL CHARLES BOISSIER Harsh.Mehta@gs.com Nida.Iqbal.Siddiqi@morganstanley.com Charles
Slide 25: Dividend Policy
FEBRUARY 2023 DIVIDEND POLICY • In June 2022 we announced our dividend policy: FY 2024 H1 2025 • Semi-annual dividend pay-outs adding to AED 800 FY 2023 million per annum were committed. • AED 200 million interim dividend paid in November 2022, and AED 200 million is proposed by Board of H2 2022 Dir
Slide 26: Business Districts Performance
BUSINESS DISTRICTS PERFORMANCE
Slide 27: Commercial Leasing Segment
FEBRUARY 2023 COMMERCIAL LEASING SEGMENT REMARKABLE PERFORMANCE UNDERPINNED BY STRONG DEMAND DYNAMICS IN OFFICE PROPERTIES AND AN EXPANSIONARY DUBAI ECONOMY DESCRIPTION FY 2022 FY 2021 % CHANGE YOY Revenue growth driven by: • New BTS projects REVENUE 1,056 901 17% • Strong and significant increase i
Slide 28: Industrial Leasing Segment
FEBRUARY 2023 INDUSTRIAL LEASING SEGMENT CONTINUED STRONG GROWTH MOMENTUM AS SEGMENT BENEFITS FROM STRUCTURAL LONG-TERM TAILWINDS IN THE INDUSTRIAL, CONSTRUCTION AND LOGISTICS AND E-COMMERCE SECTOR DESCRIPTION FY 2022 FY 2021 % CHANGE YOY Revenue growth driven by: REVENUE 274 244 12% • Higher occupa
Slide 29: Land Leasing Segment
FEBRUARY 2023 LAND LEASING SEGMENT STABILITY IN THE LAND LEASE SEGMENT WITH HIGHER OCCUPANCY RATES AND STABLE EBITDA MARGINS LAND BANK DESCRIPTION FY 2022 FY 2021 % CHANGE YOY LEASED VACANT DEVELOPMENT INDUSTRIAL LAND COMMERCIAL LAND 1M, 1% REVENUE 427 439 -3% 8M, 5% 29M, 18% EBITDA 358 368 -3% EBID
Slide 30: Services & Others Segment
FEBRUARY 2023 SERVICES & OTHERS SEGMENT CONTINUED GROWTH MOMENTUM SUPPORTED BY AN INCREASE IN THE NUMBER OF CUSTOMERS AND GROWING NUMBER OF EMPLOYEES RETURNING TO WORK FROM OFFICE DESCRIPTION FY 2022 FY 2021 % CHANGE YOY REVENUE 216 182 19% EBITDA 153 114 34% EBIDTA MARGIN 71% 63% 8% • Strong increa
Slide 31: Sustainability and ESG
SUSTAINABILITY AND ESG
Slide 32: Environment & Sustainability Goals
FEBRUARY 2023 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 procurement 2030 Dubai In
Slide 33: Key ESG Highlights and Achievements of 2022
FEBRUARY 2023 Key ESG Highlights and Achievements of 2022 Economy 88% AED 726MN 346 Customer satisfaction rate, Net profit for year 2022 Active Start-ups 5% increase from 2021 (+28% increase from 2021) (16% up from 2021) Community AED 883,000 12,000 Donated in 2022 AED 703,000 Iftar meals were distr
Slide 34: Key ESG Highlights and Achievements of 2022 - Cont'd
FEBRUARY 2023 Key ESG Highlights and Achievements of 2022 - Cont’d People 23% 1/3 2,658 hrs. 0 Emiratisation Rate of our employees of training delivered to our Work-related injuries or are female employees fatalities since 2019 Environment 11.14GWh 22 25% Clean Energy Generation LEED certified build
Slide 35: Outlook
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Slide 36: Priorities for 2023 & Beyond
PRIORITIES FOR 2023 & 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 throughout our ecosystems products to b
Slide 37: Growth Drivers
FEBRUARY 2023 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-suit growth upside fr
Slide 38: Thank You
TECOM GROUP Bad 3 i : sien } THANK YOU