Investor Presentation - Second Quarter 2018 1 August 2018 | Cairo, - PowerPoint PPT Presentation

Investor Presentation - Second Quarter 2018 1 August 2018 | Cairo, Egypt

Table of Contents I. Macro Overview • Economic Fundamentals • Results in Perspective II. Consolidated Results • Group Highlights • Consolidated Income Statement • Consolidated Balance Sheet III. Business Lines ’ Performance • Non-Banking Financial Services (NBFS) • Leasing • Microfinance • Investment Bank • Brokerage • Asset Management • IB Advisory

I. Macro Economic Update

GDP growth continues to expand as government-initiated H1 2018 .. Bringing unemployment down to 10.6% in Q1 2018 structural reforms pay-off.. Unemployment Rate (%) GDP growth (%) 12.00 5.4 5.4 Economic 5.3 5.2 11.98 11.98 4.9 11.30 Fundamentals 4.3 10.60 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 GDP growth recorded 5.3% for the fiscal year FY17/18 The unemployment rate fell 140 bps y-o-y Fuel price hikes averaging c. 45% implemented in Q2 2018 Leading the CBE to delay monetary easing until Q4 2018 raised headline CPI to 14.4% in June from 11.4% in May or Q1 2019 Policy Rates Headline CPI 19.25% 17.1% 14.4% 18.25% 14.4% 13.3% 11.4% 13.1% 17.25% 17.25% 17.25% 09/07/17 18/02/18 01/04/18 17/05/17 28/06/17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Fuel subsidy removal came as the government continued fiscal Following two consecutive rate cuts totalling 200 bps, the CBE consolidation measures, minimizing the budget deficit, which kept rates on hold for the past 2 meetings narrowed to less than 10% of GDP in FY17/18 Sources: CAPMAS, CBE 4

II. Consolidated Results

H1 2018 Consolidated Total Revenues Net Operating Profit Operating Profit Results Margin EGP 1.1 bn EGP 301.8 mn 26.7% Group ↑ 46% y-o-y ↑ 111% y-o-y H1 2017 EGP 778.0mn H1 2017 EGP 140.2mn H1 2017 18.4% Hig ighlights Cost-income 1 (%) Net Profit Margin Annualized Return on Av. Equity (ROAE) 2 27.3% 19.6% 14.3% H1 2017 22.1% H1 2017 11.0% H1 2017 25.1% Net Income By Business Line H1 2017 H1 2018 Investment Bank and Leasing Leasing Holding 48% 33% 28% EGP EGP +88% y-o-y 161.3 85.8 mn mn Microfinance Investment Bank 24% and Holding 67% Cost-income is calculated as people ’ s cost and other SG&A divided by total revenue 1. 2. ROAE calculation is normalized for one-off IPO transaction related expenses and calculated using weighted 6 average equity during the period.

H1 2018 Consolidated Summary Consolidated Income Statement Results commentary Results Statement of f EGP mn H1 2018 H1 2017 y-o-y Consolidated revenue grew 45.5% y-o-y given strong growth in revenues from the Consolidated Revenue 1,13 132. 2.1 778. 78.0 0 45.5% all group lines of business. NBFS made up Profit and 77.6% of consolidated revenue while the Leasing 738.0 564.3 investment bank along with the holding 30.8% company represented the remaining Loss Microfinance 140.1 - NM 22.4%. Investment Bank and Holding 254.2 213.7 18.9% Total operating expenses grew 30.8% y-o-y Operating Expenses 830.3 643.7 30.8% given regular salary increases and an expansion in leasing and microfinancing 342.1 222.3 53.9% Financing Cost operations. People ’ s Cost & Other SG&A represented Dep. of finance leased assets 266.1 240.5 10.7% 19.6% of revenue, down from 22.1% in the comparable period last year. People Cost & Other SG&A 222.1 171.9 29.2% Financing costs y-o-y growth was significantly lower than Q1 2018 as a result of deleveraging the balance sheet using IPO Net Operating Profit 301. 01.8 140. 40.2 2 110. 10.6 % proceeds. 26.7% 18.4% Net Operating Margin Net operating profit grew 110.6% y-o-y on a widening operating profit margin. Net Profit After Tax & Minority 161. 61.3 85.8 88.0% Net profit after tax and minority reached Interest EGP 161.3 mn in H1 2018, representing an annualized ROAE 1 of 27.3%. 1. ROAE calculation is normalized for one-off IPO transaction related expenses and calculated using weighted average equity during the period. 7

Summary Consolidated Balance Statement Result commentary H1 2018 Consolidated Results EGP mn H1 2018 H1 2017 114.0 104.6 PP&E 348.8 23.0 Goodwill Total assets grew 50% y-o-y driven by 6,194.5 4,580.8 Balance Sheet Finance Leased Assets, net 35% increase in finance leased assets, 214.6 - Securitization Difference, net 106% increase in cash and cash (917.3) (467.9) Other Non-Current Assets equivalents as IPO proceeds entered the 5,954.5 4,240.5 Non-Current Assets business. Goodwill reported in H1 2018 1,222.2 593.1 Cash and cash equivalents grew y-o-y due to the Group ’ s 1,464.9 875.0 Debit Clients acquisition of Reefy in December 2017. 85.2 - Clearing Accounts - Debit 104.0 159.6 Other Current Assets 2,876.3 1,627.6 Current Assets 8,830.9 5,868.1 Total Assets Shareholder Equity to Parent grew 544.2 311.5 Paid-in capital 183% y-o-y given the successful 563.8 347.3 completion of the initial public offering Retained earnings 861.3 - of 41.5% of CI Capital ’ s shares. The IPO Share premium reserve 65.2 59.6 was followed by a c. 1 bn capital Other 2,034.5 718.4 increase, of which EGP 861.5mn is Shareholders ’ Equity (Parent Company) classified under the share premium 101.4 119.5 Shareholders ’ Equity (Non-Controlling Interest) reserve. 2,135.9 837.9 Total Shareholders ’ Equity 4,081.9 3,137.6 Long Term Loans and Facilities 142.3 37.8 Other Long Term Liabilities 4,224.2 3,175.4 Non-Current Liabilities LT and ST loans and facilities increased 1,424.3 868.4 Short Term Loans and Facilities 30% and 64% respectively y-o-y on 535.4 435.4 Credit Customers significant expansion in microfinance 511.1 551.0 Other Short Term Liabilities and leasing activities in the period. 2,470.8 1,854.9 Current Liabilities 8,830.9 5,868.1 Total Liabilities & Equity 8

II. H1 2018 Business Lines ’ Performance

• Corplease, the Group ’ s leasing arm continues to provide financial leasing solution to Egypt ’ s largest corporates in 12 distinct economic sectors H1 2018 Business Lines ’ Performance Leasing Revenue – EGP mn Contribution to Net Profit 738.0 NBFS - 564.3 Microfinance Holding & IB 24% 28% 382.2 290.3 Leasing Leasing Q2 2017 Q2 2018 H1 2017 H1 2018 48% Total Outstanding Leased Portfolio Interest Income – EGP mn 390.6 5.3 Corplease ’ s Interest income 284.7 4.1 leased portfolio grew 37% y-o-y grew 28.3% y-o-y on a larger as economic outstanding recovery portfolio continues H1 2017 H1 2018 H1 2017 H1 2018 Key y Growth th Driv ivers New bookings Market share 1 Net interest margin (NIM) EGP 1.67 bn 18.9% 5.5% + 61% y-o-y 1. As of the latest publically available data published Financial Regulatory Authority (FRA) report for Q1 2018. 10

• Founded in 2007, Reefy is Egypt ’ s first licensed microfinance player. H1 2018 Business Lines ’ • Reefy, the Group ’ s microfinance arm, provides loans to low-income individuals through a network of over 1,200 employee spread across 44 branches nationwide Performance Microfinance Revenue 1 Contribution to Net Profit - EGP mn 140.1 NBFS - Microfinance Holding & IB 24% 75.2 28% 51.7 Microfinance 27.1 Leasing Q2 2017 Q2 2018 H1 2017 H1 2018 48% Total Microfinance Loans Outstanding Interest Income – EGP mn 135.5 596.3 Reefy is well The expanding positioned within loan book the microfinance resulted in 269.5 48.9 space, allowing significant robust loan growth in growth y-oy interest income H1 2017 H1 2018 H1 2017 H1 2018 Key y Growth th Driv ivers Number of branches Operating profit margin Number of active borrowers 44 46.5% 89 k + 9 branches y-o-y + 63% y-o-y 1. Microfinance revenues were not consolidated prior to 2018 11

• Established in 2005, CI Capital continues to offer top-tier investment banking services including H1 2018 Business Lines ’ brokerage, asset management, investment banking advisory and custody to clients worldwide Performance Investment Bank Revenue – EGP mn Holding and IB represented 28% of net profit 229.2 In Investment Holding & IB 196.2 Microfinance 28% 24% 113.5 71.5 Bank - Leasing Q2 2017 Q2 2018 H1 2017 H1 2018 48% Financial Revenue By Line of Business Investment Bank OPEX Performance Financing 229.2 19.6 54.3 Cost 24% 20.4 134.8 People Cost & Other Brokerage Asset Mgmt. IB Advisory Capital Total SG&A 76% Markets and Treasury Key Pe Perfo rformance Ind ndica cato tors Brokerage - Market Research - Stocks Asset Management - IB Advisory - Revenue Share 1 Covered AUM ’ s 10.8 % 102 EGP 8.3 bn EGP 54.3 mn + 80 bps y-o-y + 8 stocks y-o-y + 137% y-o-y + 14% stocks y-o-y 1. Market Share is for transactions on the main market excl. deals. Source: EGX 12