1H 2018 Results Agenda 1H 2018 Key Highlights & Destination - - PowerPoint PPT Presentation

1H 2018 Results

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1H 2018 Key Highlights & Destination Progress Page 3 1H 2018 Financials and KPIs Highlights Page 8 1H 2018 Financials and KPIs Appendix Page 13

Agenda

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Group Key Highlights 1H 2018

Orascom Development Egypt; remains on track with stellar results operationally and financially.

• Revenues increased by 39.8% to EGP 1.5 billion vs. EGP 1.1 billion in 1H 2017.
• Adjusted EBITDA soared by 45.9% to reach EGP 653.8 million vs. EGP 448.1 million in 1H 2017.
• Net Profits increased to EGP 184.6 million vs. adjusted net income of EGP 62.9 million in 1H 2017 (1H 2017 reported

profits was EGP 176.3 million which included a one-off gain from a settlement of borrowings amounting to EGP 113.4 million).

Real Estate

• Net sales increased by 65% to EGP 1.2 billion in 1H 2018 vs. EGP 719 million in 1H 2017 with more contribution from El

Gouna and Makadi Heights.

• Our new real estate launch in Makadi Heights was a huge success recording net sales of EGP 110.5 million vs. EGP 0.5

million in 1H 2017.

• Real Estate revenues increased by 53.8% to EGP 462.2 million vs. EGP 300.5 million in 1H 2017.
• Deferred revenue balance jumped by 70.5% to EGP 2.2 billion vs. EGP 1.3 billion in 1H 2017 in addition to a deferred

interest income of EGP 225.7 million. (Details in Appendix).

Hotels

• Hotels revenues increased by 40% to EGP 628.3 million vs EGP 448.8 million in 1H 2017 accompanied by a 55.7%

increase in the GOP to EGP 270.2 million.

Town Management

• Revenues continued to increase this quarter recording a total of EGP 261.1 million, a 37.1% increase over EGP 190.5

million in 1H 2017.

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Group Key Highlights 1H 2018

Corporate Updates

• Sold 7,955 sqm land plot in El Gouna for USD 1 million (USD 130 per sqm) to construct the first office

building and lease it to a German based company.

• Finalizing the contract for our revenue share agreement with NUCA on the 1,000 feddan plot in West Cairo,

expected within the coming 2 months.

• Finalizing the documentation for the sale of our earlier communicated 3 hotels in Makadi and Tamweel

Group which together will result in total cash proceeds of c. 800 million and working with banks on the repayment of EGP 1 billion of debt.

• Continuing to hold advanced discussions to acquire a land plot in North Coast, marking our first entrance

into second home markets.

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El Gouna 1H 2018 Updates

• Net sales increased by 52.2% to EGP 1.1bn in 1H 2018
• Hotels GOP increased by 51.3%% to EGP 270.9mn vs. EGP 179.1mn

in 1H 2017.

• In April, we launched “Ancient Sands Villas” the phase inventory

was USD 22.7mn & managed to sell almost USD 10mn to date.

• Finalized the renovation works in Turtles Inn hotel and continuing

with the other hotels to be finalized during 2018.

• Sold a 7,955 sqm land plot for a total value of USD 1mn (USD

130/sqm) to construct the 1st office building and lease it to a German based company.

• El Gouna Football Club succeeded to get back to the Egyptian 1st

Division League and for that we finalized the renovation across El Gouna stadium and now is ready to host international events.

• Planning to host the 2nd edition of El Gouna Film Festival in

September 2018 after the great success of the 1st edition.

Financials & KPIs 1H 2018 1H 2017 % Chg Hotels Number of rooms 2,477 2,468 0.4%

• Occ. for available rooms (%)

80 75 6.7% TRevPAR (EGP) 1,178 851 38.4% GOP PAR (EGP) 604 403 48.9% Total Revenues (EGPmn) 531.4 382.8 38.8% Real Estate Net Contracted Units (EGPmn) 1,073 705 52.2% No of Contracted Units 166 129 28.7%

• Avg. Selling Price (EGP/m2)

39,381 33,026 19.2% Total Revenues (EGPmn) 458 299.1 53.1% Destination Management Total Revenues (EGPmn) 243.7 172.6 41.2% El Gouna Total Total Revenues (EGPmn) 1,233.1 854.5 44.3%

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Makadi & Taba Heights 1H 2018 Updates

Makadi Heights:

• We launched a new project in April 2018 with a total

inventory of EGP 200.0mn which was a huge success. * Finalizing the documentation of the sale of the 3 hotels in addition to a land plot for EV of c. EGP 882.6 million. ODE’s stake will result in total cash proceeds of EGP 492.8

• million. The sale will also result in the deconsolidation of

EGP 260.1 million of debt.

Financials & KPIs 1H 2018 1H 2017 % Chg Real Estate Net Contracted Units (EGPmn) 110.5 0.5

• No of Contracted Units

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• Avg. Selling Price (EGP/m2)

15,718 4,984 215.4% Total Revenues (EGPmn) 3.3 1.2 175% Destination Management Total Revenues (EGPmn) 5.5 3.6 52.8% Hotels* Total Revenues (EGPmn) 37.3 29.4 26.9% Makadi Heights Total Total Revenues (EGPmn) 46.1 34.2 34.8% Financials & KPIs 1H 2018 1H 2017 % Chg Hotels Number of rooms 2,365 2,365

• Number of rooms available

1,260 992 27%

• Occ. for available rooms (%)

22 24 (8.3%) TRevPAR (EGP) 184 148 24.3% GOP PAR (EGP) (27) (47) (42.6%) Total Revenues (EGPmn) 41.8 23.9 74.9% Destination Management Total Revenues (EGPmn) 12.1 14.4 (16%) Taba Heights Total Total Revenues (EGPmn) 53.9 38.3 40.7%

Taba Heights:

• Taba Heights remains the most challenging destination

due to the extended travel bans on Sinai.

• Nevertheless we successfully curbed the GOP losses

from EGP 7.9mn to EGP 6.1mn in 1H 2018 and revenues increased by 74.9% to EGP 41.8mn vs. EGP 23.9mn in 1H 2017.

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1H 2018 Key Highlights & Destination Progress Page 3 1H 2018 Financials and KPIs Highlights Page 8 1H 2018 Financials and KPIs Appendix Page 13

Agenda

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(EGP mn) Q2 2018 Q2 2017 1H 2018 1H 2017 Revenue 873.9 599.9 1,528.8 1,093.7 Cost of sales (496.7) (344.7) (917.6) (653.0) Gross profit 377.2 255.2 611.2 440.7 Gross profit margin 43.2% 42.5% 40.0% 40.3% Investment income 42.5 21.7 89.1 37.0 Administrative expenses (27.2) (7.2) (46.5) (29.6)

• Adj. EBITDA

392.5 269.7 653.8 448.1

• Adj. EBITDA margin

44.9% 44.9% 42.8% 41.0% Other gains/losses (50.0) 23.4 (23.0) 92.2 Share of associates gain/losses (0.1) (1.0) 0.5 (0.5) EBITDA 342.4 292.1 631.3 539.8 Depreciation (58.0) (57.6) (113.7) (109.0) Finance costs (132.6) (103.8) (237.8) (198.8) Income tax expense (50.3) (30.3) (95.2) (55.7) Net profit for the period 101.5 100.4 184.6 176.3 Attributed as follows: ODE shareholders 81.7 85.6 144.0 117.4 Non-controlling interest 19.8 14.8 40.6 58.9 Basic EPS (EGP) 0.05 0.08 0.11 0.11

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Notes Revenues and gross profit increased due to the enhanced operational performance across all business segments. Investment income increased mainly due to:

• The increase in real estate cash collection.
• Increase in interest income on bank deposits.

Other gains and losses for 1H 2018 includes:

• FX losses of EGP 41.1mn.
• Other gains of EGP 18mn.

While 1H 2017 figures included:

• Gains in relation to settlement of borrowings

in the amount of EGP 113.4mn.

• FX losses of EGP 15mn.
• Other losses in the amount of EGP 6.1mn.

Increase in Finance costs mainly due to:

• Increase in interest rates Q-o-Q.

Income Tax expense increased due to the increase of the profitability of the company.

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Income Statement

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Balance Sheet

Notes PPE increased mainly due to the increase in construction activities in El Gouna. Inventory increased mainly due to the acceleration of the construction of real estate units in El Gouna. Asset and liabilities held for sale include the following:

• Tamweel Group.
• Makadi hotels.

Borrowings decreased mainly due to

• (-) Payment of EGP 218mn.
• (+) Capitalized interest of EGP 48mn
• (+) FX gain amounting EGP 31.2mn.

Other liabilities increased mainly due to Increase

• f advanced payments from real estate sales.

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(EGP mn) 30.06.18 31.12.17 Property, plant and equipment 3,512.4 3,481.0 Inventory 747.0 624.6 Receivables 1,614.7 1,578.9 Cash and bank balances 959.5 1,257.8 Investments in associates 113.2 112.8 Other assets 986.1 1,025.0 Non-current assets held for sale 2,105.5 1,976.9 Total assets 10,038.4 10,057.0 Borrowings 4,286.6 4,425.4 Payables 378.7 363.1 Provisions 297.9 292.9 Other liabilities 1,431.0 1,345.7 Liabilities related to assets held for sale 1,781.9 1,689.7 Total liabilities 8,176.1 8,116.8 Non-controlling interests 494.9 460.2 Equity attributable to ODE shareholders 1,367.4 1,480.0 Total liabilities and equity 10,038.4 10,057.0

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Financing Profile

Current debt currency

in %, as of 30.06.18

Debt by currency after ODE Rescheduling 30.6.18 31.12.17 Equity ratio (%) 18.6% 19.3% Cost of debt (%) 10.3% 10.1%

Cost of Debt is 10.3% Current Maturity as of 1H 2018 Maturity Profile after ODE Rescheduling in 2018 Cost of Debt is 9.5%

32 50 374 641 757 931 1,133 368

• CF

2018 2019 2020 2021 2022 2023 2024 2025 50 302 456 431 475 1,191 600

• 2018

2019 2020 2021 2022 2023 2024 2025 11% 81% 8%

EGP USD EUR

18% 76% 6%

EGP USD EUR

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Cash Flow Statement

(EGP mn) 1H 2018 1H 2017 Cash from operations 386 125 Interest paid (188) (14) Taxes paid (98) (41) Operating Cash Flow 100 70 Payments for PP&E (148) (136) Other items 33 37 Investing Cash Flow (115) (99) Change in Borrowings (172) 112 Other Items (93)

• Financing Cash Flow

(265) 112 Net change in cash/equivalents (280) 83 Cash & bank balances beginning of period 1,334 895 Cash & bank balances end of period* 1,054 978 Notes

Cash flow from operations and operating cash flow increased due to the enhanced

• perational

performance across all business segments during the period. Payments for PP&E includes payments mainly due Increase in construction activities in El Gouna. Change in Borrowings mainly resulting from: (-) Debt repayment of EGP 218mn. (+) Loan proceeds related to Tamweel for EGP 46mn. Other Items mainly includes EGP 80mn related to the cash dividends paid to ODE shareholders

1 2 1 2 1 3 * Includes cash related to assets held for sale. 3 4 4

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1H 2018 Key Highlights & Destination Progress Page 3 1H 2018 Financials and KPIs Highlights Page 8 1H 2018 Financials and KPIs Appendix Page 13

Agenda

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Business Segments 1H and Q2 2018

1 Adjusted EBITDA: EBITDA adjusted for non cash items (which includes provisions & impairments, other gains and losses, FX gains & share in associates) 2 Town Management includes revenues from Utilities and services, Hospital, Marina, Golf, Rentals, Educational services, Limousine, and other town amenities.

Revenue EBITDA

• Adj. EBITDA1

(EGP mn) 1H 2018 1H 2017 Δ in % 1H 2018 1H 2017 Δ in % 1H 2018 1H 2017 Δ in % Hotels 628.3 448.8 40.0% 293.5 289.3 1.5% 292.4 190.4 53.6% Real Estate 462.2 300.5 53.8% 299.7 207.5 44.4% 292.9 200.0 46.5% Land

• Town Management2

261.1 190.5 37.1% 52.5 35.5 47.9% 53.2 35.5 49.9% Tamweel Group 177.2 153.9 15.1% 62.6 64.2 (2.5%) 63.8 65.2 (2.1%) Corporate & Unallocated Items

• (77.0)

(56.7) (35.8%) (48.5) (43.0) (12.8%) ODE Group 1,528.8 1,093.7 39.8% 631.3 539.8 17.0% 653.8 448.1 45.9% (EGP mn) Q2 2018 Q2 2017 Δ in % Q2 2018 Q2 2017 Δ in % Q2 2018 Q2 2017 Δ in % Hotels 331.7 248.0 33.8% 154.8 124.5 24.3% 157.1 122.8 27.9% Real Estate 315.1 174.1 81.0% 204.9 121.2 69.1% 200.1 119.5 67.4% Land

• Town Management2

138.8 100.9 37.6% 32.7 22.5 45.3% 33.1 22.4 47.8% Tamweel Group 88.3 76.9 14.8% 28.0 31.6 (11.4%) 30.4 31.0 (1.9%) Corporate & Unallocated Items

• (78.0)

(7.7) (913%) (28.2) (26.0) (8.5%) ODE Group 873.9 599.9 45.7% 342.4 292.1 17.2% 392.5 269.7 45.5%

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Net value of Contracted Units (EGPmn) Number of Contracted Units Average Selling Price (EGP/m2) Destination 1H 2018 1H 2017 1H 2018 1H 2017 1H 2018 1H 2017 El Gouna 1,073.0 705.0 166 129 39,381 33,026 Fayoum 3.0 13.2 2 14 9,795 10,496 Makadi 110.5 0.5 81 1 15,718 4,984 ODE Group 1,186.5 718.7 249 144 34,424 31,504

Real Estate KPIs 1H & Q2 2018 and Deferred Revenue

Revenue Recognition Schedule (EGPmn)* Destination Deferred Revenue Balance 2018 2019 2020 2021 2022 2023 El Gouna 2,062.0 518.4 1,055.3 488.3

• Fayoum

30.9 2.8 15.1 6.0 6.9

• Makadi

107.7

• 13.5

26.9 26.9 26.9 13.5 ODE Group 2,200.6 521.2 1,083.9 521.2 33.8 26.9 13.5

* It is also important to note in addition to the outstanding deferred revenue balance; the Group also has a deferred interest income EGP 225.7 million.

Destination Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 El Gouna 675.6 526.6 129 92 37,088 35,084 Fayoum 3.0 6.8 2 7 9,795 10,960 Makadi 110.2 0.1 80

• 15,813

5,000 ODE Group 788.8 533.4 211 99 31,065 34,036

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Total number of hotel rooms Occupancy for available rooms (%) TRevPAR* (EGP) GOP PAR** (EGP) Destination 1H 2018 1H 2017 1H 2018 1H 2017 1H 2018 1H 2017 1H 2018 1H 2017 El Gouna1 2,477 2,424 80 75 1,178 851 604 403 Taba Heights2 2,365 2,365 22 24 184 148 (27) (47) Fayoum3 53 50 23 46 430 393 53 (2) Floating Hotel 27 27 26 23 3,006 1,830 1,208 586 ODE Group 4,922 4,866

Hotel KPIs 1H & Q2 2018

* Financial KPIs are calculated based on the number of available rooms during the reported period of 1H & Q2 2018. ** Includes all expenses of the hotels in the destinations. 1. In 2017 we transferred 83 hotel rooms of Fanadir and Bellevue into real estate products and during 1H 2018 Ancient Sands hotel room increased by 136 rooms. 2. During 1H 2018, only 4 hotels were operating (Sofitel with 442 rooms, Strand Beach Hotel with 503 rooms, El Wekala Hotel with 215 rooms and 100 rooms in Bay View Hotel out of 394 existing rooms). Whereby, only 3 hotels were operating representing 992 rooms in 1H 2017. 3. In Q1 2018; three more rooms where added to the hotel rooms bringing the total number to 53 rooms.

Destination Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 El Gouna1 2,477 2,424 81 77 1,231 952 628 479 Taba Heights2 2,365 2,365 28 25 235 166 3 (33) Fayoum3 53 50 18 38 338 351 23 4 Floating Hotel 27 27 26 18 2,930 1,662 727 211 ODE Group 4,922 4,866

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IR Dashboard

Investor Relations Contact:

Sara El Gawahergy Head of Investor Relations Tel Dir: +20 (0) 22 461 89 61 Mobile: 010 0218 5651 Sara.elgawahergy@orascomdh.com ir@orascomdh.com www.orascomde.com

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