Results Presentation Quarter ended 31 Mar 2015 0 22 April 2015 - - PowerPoint PPT Presentation

22 April 2015

Results Presentation

Quarter ended 31 Mar 2015

Disclaimer

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This presentation is being made only to, and is only directed at, persons to whom this presentation may lawfully be communicated (relevant persons). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation does not constitute or form part of, and should not be construed as, an offering of securities or otherwise constitute an invitation, inducement or recommendation to any person to underwrite, subscribe for or otherwise acquire securities in any company within the DAMAC group (the Group). Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results expressed or implied in these forward-looking statements. Forward-looking statements speak only as of the date of this presentation.

Group Structure

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Notes: 1) As at 31 Mar 2015, DAMAC Real Estate Development Limited (DRED) is a wholly

• wned subsidiary of DAMAC Properties

Dubai Co PSC (DPDC), a public joint stock company now listed on Dubai Financial Market (DFM) 2) Financial information of DPDC entirely reflects result of operations of DRED from 1st July 2014 onwards. 3) Following presentation relates to performance

• f DRED, our operating subsidiary, whose

reporting currency is US dollar. A fixed exchange rate of US$/AED= 0.2721 is used in the whole presentation DAMAC group structure DPDC, a public joint stock company now listed on Dubai Financial Market (DFM) acquired 85.72% of the

• wnership interest in DRED and

became the new holding company for the group.

30 Jun 2014: Acquired controlling interest

• f 85.72% from majority shareholder

Timeline of how DPDC acquired ownership interest in DRED Pursuant to an exchange offer by DPDC that closed on 9 Jan 2015, GDR holders holding c.97.44% elected to exchange their GDRs in DRED for shares in DPDC at an exchange ratio

• f 23.0769231 shares for each GDR.

9 Jan 2015: GDR exchange offer increased ownership to c.99.63%

DPDC initiated a statutory squeeze out process, pursuant to which it compulsorily acquired all

• f the remaining GDRs of DRED

by 16 March 2015

16 Mar 2015: Statutory squeeze out raised shareholding to 100%

Public shareholders

DAMAC Real Estate Development Limited

85.72%

Majority shareholder

100%

DAMAC Properties Dubai Co PJSC (listed on DFM)

14.28%

(DRED is sole operating subsidiary and owner of all real estate assets)

2,458 3,138 764 2013 2014 Q1 2015 Booked Sales ($ mn) 1,224 2,010 486 2013 2014 Q1 2015 Revenue ($ mn)

DAMAC overview

Headquarters in Dubai

54

mn sq ft development pipeline

7

countries with projects in- progress and in-planning

c.10,000

Hospitality units in-progress and In-planning

c.2,100

employees

600+

sales staff in over 12 sales

• ffices

450+

Project execution and execution support team

US$760mn

Booked Sales in Q1 2015

FY 2014 - $3.1bn

US$486mn

Revenue in Q1 2015

FY 2014 - $2.0bn

c.91%

• f customers are non-

UAE nationals (2007-Q1 2015 sales value)

Completed (1) projects 13,865 units 93% Total: In Dubai:

During Crisis 2009-11 Pre-crisis upto 2008 Cumulative up to 31 Mar 2015

Strong delivery track record across economic cycle Performance highlights Portfolio Overview

Note: Exchange rate US$/AED= 0.2721 used in the whole presentation (1) Completed projects: projects with Building Completion (BCC) received (2) In-progress projects: projects with enabling works started / consultant appointed (3) In-planning projects: projects with no consultant appointed

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64% YoY 28% YoY

Note: Sales Booking data as of 31 Dec 2013,31 Dec 2014 and 31 Mar 2015 respectively

In-progress (2) and In-planning (3) projects c.37,000 units c.91% 3.5% QoQ

Post-crisis 2012-1Q15

2,074 3,257 8,534 13,865 Units Completed Dubai - 12,844 units Outside Dubai - 1,021 units

Q1 2015 Performance highlights

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Revenue +11% Gross profit +16% Operating profit +6%

$485.9m $309.6m $217.2m

(Q1 2014: $435.8m) (Q1 2014: 267.5m) (Q1 2014: $204.9m)

Net profit +3% Net cash flow from

• perating activities

Total assets +8%

$215.8m $299.5m $5,554.7m

(Q1 2014: $209.6m) (Q1 2014: $328.9m) (Dec'14: $5,122.7m)

Equity +15% Cash and Bank +21% Gross Debt +11%

$1,649.4m $2,185.7m $797.7m

(Dec'14: $1,433.6m) (Dec'14: $1,799.3m) (Dec'14: $719.6m)

Debt to Total Assets Gross Margins +2.3ppt Booked Sales

14.4% 63.7% $764m

(Dec'14: 14.0%) (Q1 2014: 61.4%) (Q4 2014: $738m)

Financial Review

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• Revenues grew 11% to $485.9mn in Q1 2015

(Q1 2014: $435.8mn). Revenue from sale of land on villa units in our mastership AKOYA developments drove higher revenues.

• Gross margins at 63.7% in Q1 2015

marginally higher vs last year due to revenue mix.

• Net profit grew 3% to $215.8mn in Q1 2015

(Q1 2014: $209.6mn)

• Net Cash generated from operating

activities at $299.5mn (Q1 2014: $328.9mn)

• Total Assets up 8% during the quarter, mainly

led by $386.4mn increase in ‘Cash & Bank balance’

• Development properties and cash continues to

contributes 81% to total assets.

• Advances from customers stood at

$2,136.1mn as at Mar’15.(Dec’14: $1,985.1mn)

• Parent company DAMAC Properties Dubai
• Co. PJSC listed on Dubai Financial Market on

12th Jan 2015. Q1 2015 highlights Total Assets Development Properties Advances from Customers Revenue and Profitability Cashflow from Operations Capital Structure

436 486 210 216 61% 64%

• 20%

0% 20% 40% 60% 80% 100 200 300 400 500 600 Q1 2014 Q1 2015 Revenue ($mn) Profit for the period ($mn) Gross Margins % (RHS) 329 300 100 200 300 400 Q1 2014 Q1 2015 Cash flows from Operations ($mn) 5,123 5,555 81% 81% 0% 20% 40% 60% 80% 100% 2,000 2,300 2,600 2,900 3,200 3,500 Dec'14 Mar'15 Total Assets ($mn) Dvplmt Prop + Cash as % of TA (RHS) 140 140 1,876 1,974 311 213 2,328 2,327 500 1,000 1,500 2,000 2,500 Dec'14 Mar'15 Completed units ($mn) Properties under development ($mn) Land held for development ($mn) 1,985 2,136 1,900 2,000 2,100 2,200 Dec'14 Mar'15 Advances from Customers ($mn)

1649 2327 798 2186 2136 1043 972 Liabilities Assets

Dvlpmnt Properties Cash & Bank Other Assets Other Liabilities Advances from customers Borrowings Sharehold er’s Equity

Statement of Financial Position

6 In US$ mn Mar'15 Dec'14 Change ASSETS Property and equipment 19.0 16.3 2.7 Development properties 2,326.5 2,327.5 (1.0) Other financial assets 219.1 232.0 (12.9) Trade and other receivables 799.4 742.6 56.8 Financial investments 5.0 5.0 0.0 Cash and bank balances 2,185.7 1,799.3 386.4 Total Assets 5,554.7 5,122.7 432.0 EQUITY AND LIABILITIES Equity Share capital 650.0 650.0 0.0 Statutory reserve 41.3 41.3 0.0 Group restructuring reserve (566.7) (566.7) 0.0 Shareholder's account 150.0 0.0 150.0 Retained earnings 1,374.8 1,309.0 65.8 Total Shareholders' Equity 1,649.4 1,433.6 215.8 Liabilities Bank borrowings 153.1 75.3 77.8 Sukuk Certificates 644.6 644.3 0.3 Due to related parties 9.5 11.0 (1.5) Provision for employees’ end of service indemnity 8.5 7.9 0.6 Trade and other payables 3,089.6 2,950.6 139.0 Total Liabilities 3,905.3 3,689.1 216.2 Total Shareholders' Equity & Liabilities 5,554.7 5,122.7 432.0 Development Properties - Mar’15 ($ mn) Trade and other payables - Mar’15 ($ mn)

140 1,974 213 Land held for future development Properties under development Completed properties 2,136 183 239 124 408 Advances from Customers Accruals Other payables Retentions payable Deferred consideration for land payments

205 217 100 200 300 Q1 2014 Q1 2015 Operating Profit ($ mn) 210 216 100 200 300 Q1 2014 Q1 2015 Net Profit ($ mn) 268 310 100 200 300 400 Q1 2014 Q1 2015 Gross Profit ($ mn) 436 486 100 200 300 400 500 600 Q1 2014 Q1 2015 Revenue ($ mn)

Statement of Comprehensive Income

7 Revenue Gross Profit Operating Profit Net Profit In US$ mn Q1 2015 Q1 2014 Growth Revenue 485.9 435.8 11% Cost of sales (176.3) (168.3) 5% Gross profit 309.6 267.5 16% Gross profit margin 63.7% 61.4% Other operating income 4.2 2.2 91% General, administrative and selling expenses (79.5) (49.9) 59% Brokerage commissions (16.0) (13.9) 15% Depreciation (1.1) (1.0) 10% Operating profit 217.2 204.9 6% Operating profit margin 44.7% 47.0% Other Income 2.5 2.5 0% Finance Income 5.2 3.0 73% Finance Costs (9.1) (0.8) 1038% Profit/(Loss) for the period 215.8 209.6 3% Items that may be reclassified subsequently to profit or loss 0.0 0.5 NA Total Comprehensive Income 215.8 210.1 3% Net income margin 44.4% 48.2%

11% 16% 6% 3%

329 300 100 200 300 400 Q1 2014 Q1 2015 Net Cashflow from Operations ($ mn)

Statement of Cash Flows

8 Net Cash flow from operating activities

Movement in cash and cash equivalents during Q1 2015

• 9%

In US$ mn Q1 2015 Q1 2014 Change Cash flows from operating activities Profit for the period 215.8 209.6 6.2 Adjustments for: Depreciation on property and equipment 1.1 1.0 0.1 Provision for employees’ end-of-service indemnity 0.8 0.6 0.2 Amortisation of issue costs on Sukuk certificates 0.3 0.0 0.3 Loss on disposal of financial investments 0.0 0.3 (0.3) Finance costs 9.1 0.8 8.3 Finance income (5.2) (3.0) (2.2) Provision for impairment for trade receivables 16.4 (3.8) 20.2 Operating cash flows before changes in working capital 238.3 205.5 32.8 Incr in trade and other receivables (73.2) (105.2) 32.0 Decr in development properties 1.0 16.9 (15.9) Incr in trade and other payables 131.0 210.8 (79.8) Decr in due to a related party (1.5) (1.2) (0.3) Net cash generated from operations 295.6 326.8 (31.2) Finance costs paid (1.1) (0.8) (0.3) Interest received 5.2 3.0 2.2 Employees’ end of service indemnity paid (0.2) (0.1) (0.1) Net cash generated from operating activities 299.5 328.9 (29.4) Net cash (used in) / generated from investing activities (25.1) 2.6 (27.7) Net cash generated from financing activities 77.8 64.8 13.0 Net Increase in Cash & Cash Equivalents 352.2 396.3 Opening Cash & Cash Equivalents 1,456.7 545.7 Closing Cash & Cash Equivalents 1,808.9 942.0 1,457 300 25 78 1,809 400 800 1,200 1,600 2,000 Opening Cash & Cash Equivalents CF from Operating activities CF from Investing activities CF from Financing activities Closing Cash & Cash Equivalents

Operational Review

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• Booked sales value stood at $764mn in Q1

2015 vs $738mn in Q4 2014.

• AKOYA master developments witnessed total

sales of c.$3bn up to Mar’15 since launch.

• DAMAC Towers by Paramount has recorded

booked sales c.$776mn up to Mar’15.

• Completed 999 units in Q1 2015 in Lakeside
• projects. Cumulative deliveries till date

13,865units.

• Construction progressing as planned across

projects under development.

• Other Key launches during the period were,

Promenade Residential and serviced apartments at AKOYA by DAMAC, Carson A, B & C, the Dubai Rainforest alongside retail and entertainment components plus further villas & townhouses at AKOYA Oxygen.

• Hospitality - Currently have five operational

properties under management of DAMAC hotels and resort under Maison and Naia brands. Q1 2015 highlights Area Sold Booked Sales Units completed Advances from Customers

576 999 200 400 600 800 1,000 1,200 Q1 2014 Q1 2015 Units Completed 1,985 2,136 1,900 2,000 2,100 2,200 Dec'14 Mar'15 Advances from Customers ($mn) 738 764 150 300 450 600 750 900 Q4 2014 Q1 2015 Booked Sales ($mn) 2.1 2.2 0.0 0.5 1.0 1.5 2.0 2.5 Q4 2014 Q1 2015 Area sold (mn sq ft)

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Portfolio Overview (as at 31 Dec 2014)

Portfolio by product (in progress and in-planning projects) Portfolio by development status Portfolio by location (in progress and in-planning projects)

International

No of projects 10 Units 2,513 Sellable area (k sq ft) 3,278 Completion date 2019

UAE

No of projects 31 Units 35,535 Sellable area (k sq ft) 51,003 Completion date 2015/19

Completed , 12.18, 18%

In- Progress, 51.35, 77% In- Planning, 2.93, 5% Area (mn sq ft) UAE, 35,535 , 93% KSA, 472 , 1% Qatar, 789 , 2% Lebanon, 188 , 1% Iraq, 220 , 1% Jordan, 398 , 1% Bahrain, 446 , 1%

No of Units

Serviced apts, 7,740, 20% Hotel rooms, 2,125, 6% Others, 28,183, 74% No of Units

Well established luxury Brand Track Record of Delivery Co-branded developments with global luxury brands Hospitality – DAMAC Maison / NAIA by DAMAC Efficient and low leverage operating model Dubai market dynamics supports strong and sustainable growth Sizeable sales force

• f 600+

Aspire to be the market leader in Middle East luxury real estate

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Key Messages

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Thank you

investor.relations@damacgroup.com