Egyptian For Tourism Resorts · EGX:EGTS
Egyptian For Tourism Resorts — Q3 2013 Earnings Presentation
46 slides from Egyptian For Tourism Resorts's earnings presentation, November 2013
Slide 1: Investor Presentation Q3 2013
Investor Presentation Q3 2013
Slide 2: Disclaimer
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 of an offer to subscribe for or purchase securities of any kind and neither this document nor anything contained herein shall form th
Slide 3: Agenda
AGENDA Investment Highlights ERC — Egypt's Leading Master Developer Corporate History and Recent Events Sah! Hasheesh - ERC’s Mega Resort Community Market Opportunity Summary oa KRW WN Appendices
Slide 4: Investor Presentation 3Q 2013
4 Investor Presentation 3Q 2013
Slide 5: Agenda
AGENDA 1 Investment Highlights ERC — Egypt's Leading Master Developer Corporate History and Recent Events Sah! Hasheesh - ERC’s Mega Resort Community Market Opportunity Summary Oo oa ff W Appendices
Slide 6: The ERC Business Model
Manage the community and supply of utilities The ERC Business Model: Implement design 1 Acquire broad acre land holdings suitable for high quality development at nominal guidelines value – Sahl Hasheesh land bank acquired in 1995 for an average of USD 1.32/m2 Develop prime residential and 2 Create a
Slide 7: Three Revenue Streams
• By world-class master planners Land Identification/ • Design and construction guidelines and Three Revenue Streams Investment Acquisition conditions + ERC leverages strong brand partnerships, a comprehensive • Water Desalination Plants and Networks development model and management structures that
Slide 8: Agenda
AGENDA 1 Investment Highlights W) ERC — Egypt's Leading Master Developer Corporate History and Recent Events Sah! Hasheesh - ERC’s Mega Resort Community 5 Market Opportunity Summary 6 Appendices
Slide 9: Legal Structure and Listing
Legal Structure Egyptian Public Joint Stock Company KATO Investment Listing 11.96% Free Float Egyptian Exchange (EGX) 31.91% Rowad Tourism Company Authorized Capital (EGP) 2,000,000,000 10.00% Paid-in-Capital (EGP) 1,050,000,000 First Arabian Company Nominal Share Value (EGP) 10.00% 1.00 Other long-
Slide 10: Corporate History and Recent Events
2013 onwards 2013 • Sign on the first hospital / wellness facility • Deliver the Sawari marina project and maintain infrastructure development pace ahead 2011 of resort city demand Design Construction 2010 2010 - 2012 Marketing 2009 • New management augments existing internal structure taking compan
Slide 11: Strategy: Emerging from the Crisis
Emerging from the Crisis: Another Opportunity Dislocations post the global financial crisis and the Jan 25 uprising have left Sahl Hasheesh with the opportunity to emerge as the destination of choice for investors Growing strategic real estate projects: Sawari marina, Old Town commercial center and
Slide 12: Share price performance versus peers
200 180 160 140 120 100 80 60 40 20 0 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 ERC MNHD OCDI ODHN PHDC TMGH EGX30 12 Investor Presentation 3Q 2013
Slide 13: Agenda
AGENDA 1 Investment Highlights W) ERC — Egypt's Leading Master Developer 3 Corporate History and Recent Events Sahl Hasheesh - ERC’s Mega Resort Community 5 Market Opportunity Summary 6 Appendices
Slide 14: Investor Presentation 3Q 2013
14 Investor Presentation 3Q 2013
Slide 15: Sahl Hasheesh: purpose-built Red Sea destination
Sahl Hasheesh is a unique, purpose-built Red Sea destination 18 kilometers south of Hurghada International Airport and approximately • 18 km south of Hurghada Int’l Airport 470 kilometers from Cairo. The year-round development – • 22 km south of Hurghada city center LOCATION • 470 km from Cairo appr
Slide 16: Phase III development and land allocation
Phase III shapes and brings online phased districts totaling 28 million square meters, and is the key to transforming the development from a pure resort to a thriving resort city. The WATG design introduces the heart of the city: hospitals, schools, office buildings and SMEs are among the developmen
Slide 17: Phases I and II of Sahl Hasheesh
Phases I and II of Sahl Hasheesh are currently home to 2,318 hotel rooms Phase 1 6 million m² and suites managed by brands including Premier Le Rêve, Premier Romance, Pyramisa, and Marriott Old Palace in addition to 1,363 • Fully finished: 1,647 rooms (4 projects) residential units. Hotel Rooms • Du
Slide 18: Controlled Supply, Superior Infrastructure, One-Stop-Shop
Controlled Supply Large – yet strategically released – land phases deployed based on development and ROI protection. Land supply around Hurghada is eroding quickly, while future sites at Sahl Hasheesh are easily brought online on short timelines, allowing profit protection. STP Superior Infrastructu
Slide 19: Community Management in an Upscale Resort
Community Management in an Upscale Resort Architectural integrity and cohesion guaranteed by strict design guidelines coupled with innovative design concepts promise an ideal physical environment. Community management controls and regulations ensure an uncommonly high level of environmental amenity
Slide 20: Three Revenue Streams
Land Identification/ Three Revenue Streams Investment Acquisition ERC leverages strong brand partnerships, a comprehensive development model and management structures that are transferable across projects and sectors – our ambition is to build a prolific regional master developer generating long ter
Slide 21: Land Sales
Land Sales © SAHL HASHEESH RED SEA, EGYPT
Slide 22: Land sales process and plot release schedule
Review Offer Acceptance + CapEx Construction • Offer received from • Sales contract signed 1. Plans reviewed against • Infrastructure coordination developers/investors (includes exclusive design guidelines with developer utilities agreement) • Reservation payments 2. Construction permit • Infrastruc
Slide 23: Industry-Beating Model
Industry-Beating Model 3.1 million m² (excluding Phase III and Sawari Marina) remain in the pipeline at Sahl Hasheesh. Average sales price grew at 89% annually before the global financial crisis and profit margins reached 84%. Weighted Average Sales Price/m² Achieved (USD) Weighted Average Cost/m² (
Slide 24: Revenue Stream: Real Estate Development
Revenue Stream 2 Real Estate Development: Strategic Projects and Sahl Hasheesh Company
Slide 25: Build-to-Lease and Build-to-Sell plots
The Old Town and public beach Sole developer for Phases I and II downtown Acquires plots at market prices for mixed-use commercial retail and entertainment areas development Build-to-Lease Build-to-Sell Plot # Size (m²) Type of Development #Plot Size (m²) Type of Development 9A 57,528 Phase 1 – Reta
Slide 26: Build-to-Lease and Build-to-Sell economics
• Leasing Terms: Flexible performance-based leases Footprint designated for commercial and 115,188 m² Build-to-Lease entertainment space • Lease Rates: Subject to yearly review/escalation With an expected payback Net Area Available for 217,275 m² USD/m² period of just over 3 years, Lease commercial
Slide 27: Sawari Marina
• 2.5 million m2 exclusive community centered around a world-class yacht club and marina. • Water surface area of 117,000 m2 to host 330+ boats and yachts from 10-to-60 meter+ in length. • Two 5-star and one 4-star hotels in Phase 1 around the marina basin. • 1,000+ villas and apartments in Phase 1—
Slide 28: Sawari sales and project highlights
ERC’s pre-launch sales event in late 2010 a great success: Sales of luxury villas and condominiums significantly outpaced ERC’s best-case-scenario projections, underscoring the strength of demand for ERC’s strategic developments at Sahl Hasheesh. Project highlights: • Total area of phase 1: 1.1 M sq
Slide 29: Investor Presentation 3Q 2013
29 Investor Presentation 3Q 2013
Slide 30: Jamaran villas
• All Jamaran villas afford open views of the Red Sea’s shimmering waters. • Spans a total area of 320,000 m2. • 47 two-storey villas: four designs with total floor areas from 318 to 330 m2. • As with all Sahl Hasheesh properties, the Jamaran villas will be built according to the highest standards o
Slide 31: Jamaran project highlights
Jamaran will be connected to Old Town by a boardwalk, and within Jamaran itself, a range of amenities are planned. These include a network of parks spread out amongst the villas, a private club house featuring a spa, dining area and gym, and mini golf courses. Project highlights: • Number of villas:
Slide 32: Jamaran villa designs
The Arabesque design The Mediterranean design View from a completed villa in Jamaran 32 Investor Presentation 3Q 2013
Slide 33: Revenue Stream: Community and Utilities Management
Revenue Stream 3 Community and Utilities & SAHL HASHEESH Management eel
Slide 34: Cost recovery and profit centers from recurring revenues
1 cost recovery and 3 profit centers from recurring revenues Supply of Community Water Electricity Communications Services • ERC invests in desalination • ERC invests in internal • ERC invests in equipment and • Ernst Body Corporate plant and equipment electricity grid black fiber network throughout
Slide 35: Agenda
AGENDA 1 Investment Highlights 2 ERC — Egypt's Leading Master Developer 3 Corporate History and Recent Events 4 Sah! Hasheesh - ERC’s Mega Resort Community Market Opportunity Summary 6 Appendices
Slide 36: Share data and trading
Shares Outstanding 1,050,000,000 Share Price* EGP 1.05 160 140 Market Cap. (EGP)* 1,102,500,000 120 Average Daily Volume** 4,331,983 100 9 M- 2013 80 60 Revenue EGP 24.9 million 40 EBT EGP (18.2) million 20 EBT Margin (73) % 0 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 *Based on close November
Slide 37: Consolidated Liquid Assets and Liabilities
Consolidated Liquid Assets and Liabilities (EGP Millions) 509.4 534.2 443.5 331.9 384.2 226.9 248 192.1 216.4 197.1 208.1 361.9 462.3 371.2 309.2 273.8 260.0 233.6 248.1 238.6 200.0 271.1 124.8 247.4 136.5 2008 2009 2010 2011 2012 9M 2013 Cash & TB Receivables Current L. Long Term L. 37 Investor Pre
Slide 38: Agenda
AGENDA 1 Investment Highlights 2 ERC — Egypt's Leading Master Developer 3 Corporate History and Recent Events 4 Sah! Hasheesh - ERC’s Mega Resort Community 5 Market Opportunity Summary Appendices
Slide 39: Tourist arrivals to Egypt
Breakdown of Arrivals by Region of Origin | 2012 North America Asia Pacific 4.2% 3.7% • 11.5 million tourists visited Egypt in 2012 down from 14.7 million in 2010 Africa • Reduced room rates facilitating current revival 4.3% • Egypt accounts for: • 25% of tourist arrivals in MENA Middle East • 33% o
Slide 40: Tourism on the Egyptian Red Sea
Egyptian Tourist Arrivals to Egypt | Millions Revolution Overnight Stays in Hotels by Tourists (millions) Sharm El Sheikh attacks EGP Devaluation 9/11 Dahab President attacks Morsi Elected Taba & Noweiba attacks • 11.5 mn tourists in 2012 vs. 14.7 mn in 2010 • Red Sea accounts for Approx. 50% of tot
Slide 41: Vision and mission
To become a regional Master Developer To make our shareholders proud of the To successfully implement the identified of International-standard mega company’s standards, reputation, initiatives to ensure the success of our communities by designing and operational performance and financial main produc
Slide 42: Board and management biographies
Adel Hammad, Chairman Mr. Hamad is the previous Chairman and CEO of Misr Insurance. He has more than 15 years of experience in the insurance sector. He served as board member in several companies and banks such as, the Housing and Development Bank, Alexandria Spinning and Weaving company, and Misr O
Slide 43: Management biographies
Osama Shendy, Director — Human Resources Mr. Shendy joined ERC with 19 years’ experience, bringing his extensive expertise in strategic planning, restructuring, organizational development, human resources management, and quality management systems. Prior to joining ERC, Mr. Shendy has acted as lead
Slide 44: Financial summary 2008 to 9M 2013
2008 2009 2010 2011 2012 9M 2013 Revenue 347.8 25.8 14.9 28.2 40.5 24.9 Gross Profit 324.0 12.1 (5.8) (2) (11.3) (12.0) EBT 345.9 3.9 (7.8) (3.2) (106.9) (18.2) Net Income 265.8 4.7 (9.4) (7.4) (110.0) (20.4) 2008 2009 2010 2011 2012 9M 2013 Cash & Treasury Bills 371.2 309.2 273.8 200.0 162.0 124.8
Slide 45: Sahl Hasheesh downtown and marina
The downtown commercial The Marina of Sahl Hasheesh, In-house development of sea- area and public beach of Sahl under development in front residential villas with Hasheesh. Developed by Sahl partnership with Orascom exquisite open water views and Hasheesh Co., the subsidiary Development and large ga
Slide 46: www.erc-egypt.com
www.erc-egypt.com www.sahlhasheesh.com
Egyptian For Tourism Resorts (ERC) — Q3 2013 Earnings Presentation on 6ix