1 DEVELOPING EAST CAIRO SINCE 1959
MNHD at a glance 2 2019 MNHD
Corporate History & Structure MNHD is currently positioned as one of the leading real estate developers in Egypt MNHD s history dates back to 1959 when it was established as a government-owned joint stock company that listed on the EGX in 1996 In 2006, B Investments along with co-investors acquired a 31.2% stake in MNHD (the single largest shareholder collectively) BPE via its controlling stake has managed MNHD s successful turnaround, positioning the company as one of the top real estate developers in Egypt The company historically developed the majority of Nasr City district in East Cairo, covering an area of over 40mn sqm with 3 million inhabitants MNHD currently has two main developments; Taj City- 3.5mn m 2 mixed use development in East Cairo (in front of Cairo Airport) Sarai- 5.5mn m 2 mixed use development in East Cairo (strategically located next to the new administrative capital) 45.3% SHAREHOLDING STRUCTURE 19.9% 7.5% KEY STATISTICS CONTRACTED SALES (FY 2018) EGP 5.5BN 15.2% LAND BANK (m 2 ) LAND BANK LIABILITIES 9MN MINIMAL NET PROFIT MARGIN (9M18) 41% MARKET CAP (31-DEC-2018) EGP 8.1BN 1.7% 3.2% 3.5% 3.7% BIG Investment Group (BPE Managed Vehicle) B Investments (BPE Managed Vehicle) Holding Company for Construction and Development National Investment Bank Olayan Saudi Investment Company Banque Misr Schroder International Free Float 3
MNHD Proposition Outstanding Taj City land disputes resolved Changed the business model to include off plan sales 2 3 Turnaround Sarai master plan developed by renowned British master planners and approved via a Ministerial decree MNHD was positioned as a top tier real estate developer Another wave of corporate restructuring that brought in new talent in key positions 2006/2007 2009 2012 2013 2015 2016 2017 BoD reshuffled and control assumed New CEO appointed, stronger team brought in (multinational background) Launched Tag Sultan in 2012; a 1,700-unit project in Taj City where sales exceeded EGP 2.1 bn Signed a codevelopment agreement with a major private sector developer to develop 433,000 sqm in Sarai Launched Sarai Reached EGP 5bn in Contracted Sales Approved the new and improved master plan for Taj City Achievements Resolved Disputes on 9mn sqm of land Market Cap (EGP bn) c. 5x Growth 8.1 Changed management and developed master plan for land bank 1.8 2006 31-Dec-18 Launched and sold mega projects (aborted raw land sales model) Revenue (EGP mn) c. 12x Growth 2,428 Expanded positioning to upper middle income market 4 205 2006 2017
MNHD Project Segmentation Gross Land Area (K sqm) 752 551 458 806 700 811 5,623 3,555 618 3,056 Launched & Sold Launched & Unsold Unlaunched Residential Unlaunched Commercial Capital Gardens 1,426 Launched & Sold Launched & Unsold Unlaunched Residential Unlaunched Commercial Taj City Sarai 5
MNHD Stock Performance Outstanding Shares 1,200,000,000 Price (31-Dec-18) 6.73 Market Cap (31-Dec-18) 8.1bn FY2018 Price High/Low 11.96/6.25 FY2018 AVG Volume 2,239,422 FY2018 Volume High 16,682,312 FY2018 Volume Low 200,123 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 5.00 Jan-01-2018 Feb-01-2018 Mar-01-2018 Apr-01-2018 May-01-2018 Jun-01-2018 Jul-01-2018 Aug-01-2018 Sep-01-2018 Oct-01-2018 Nov-01-2018 Dec-01-2018 6
FINANCIAL Updates PRE-SALES (EGP MN) NET REVENUES (EGP MN) DEBT (EGP MN) CAGR: 52% 3,425 5,163 5,495 CAGR: 48% 2,014 2,428 1,710 2,060 688 536 1,039 823 744 771 2014 2015 2016 2017 2018 2014 2015 2016 2017 9M2017 9M2018 2Q18 3Q18 293 299 39% 39% CAGR: 60% EBITDA (EGP MN) MARGIN (%) 1,031 1,195 51% 49% 1,007 59% 1,210 59% 2014 2015 2016 2017 9M17 9M18 203 27% 262 NET INCOME (EGP MN) MARGIN (%) CAGR: 66% 34% 767 932 38% 38% 755 840 44% 41% 2014 2015 2016 2017 9M17 9M18 EQUITY (EGP MN) 0.24 0.17 2,877 2Q18 3,129 3Q18 Debt/Equity
MNHD Developments since 2010 Management is at the helm of MNHD following the implementation of the turnaround plan Operations Solved all outstanding land disputes and got land bank ready for Human development Resources Used, for the first time, external / international master planners for Taj City and Sarai Hired a new top management team Business Obtained approval on Sarai master plan (5.5mn m 2 ) and working on finalizing Taj City s master plan in the next 90 days Launched the first large scale development project in the history of MNHD, Tag Sultan MNHD started unlocking value in its prime Sarai land through a codevelopment agreement and is in the process of starting its own development on Sarai Secured recurring income by partnering up with Fawaz Al Hokair Group to develop a mall in Taj City from multinational firms and regional developers to lead the company Attracted young talent from top universities to join the company Reduced the company hierarchy to be much more efficient Introduced a matrix based organization to support different real estate projects Introduced a new Development Department responsible for on going projects and Properties Department responsible for the remaining land bank Model Introduced off-plan sales Reduced construction time of Waha buildings from 36 month to 14 months Followed the market by introducing semi-finished units instead of finished ones Marketing Upgraded the MNHD logo to give a more modern feel to the brand For the first time in the company s history, started airing TV ads to secure MNHD s place among top real estate developers 8
Real Estate Market 9 2017 MNHD.
Real Estate Market Overview The ever growing population is primarily composed of individuals under the age of 40 The annual average number of marriages are increasing each year, estimated at 1,000,000 per year There is a growing middle class which are seeking out more moderate-high end housing options which can only be provided for by the private sector Egypt has strong demographics supporting the increase in real estate demand Egypt Age Demographics GDP per Capita (USD) Egypt Population Growth (millions) 44% 3,181 3,213 3,327 3,547 3,477 87.8 89.8 91.8 93.7 95.7 Below 20 20-40 Above 40 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 24% 32% 10
Land Bank 11 2018 MNHD.
Taj City 5 th Settlement SARAI New Administrative Capital 9mn m 2 of Strategically Located Land Bank
One of the largest land plots inside Cairo across from Cairo International Airport Up to 40% foot print Master plan approved in January 2018 Launched first project, Tag Sultan, in October 2012 (sold out) Launched phase two of Taj City (T ZONE) in 4Q2015 (phase 1 sold in 4Q2015, phase 2 launched in May 2016) Infrastructure for Taj City is in final stages 3.5 million m 2 of prime land bank inside Cairo Master plan approved in January 2018 MASTER PLAN SPECIFICATIONS GLA: 3,5 million BUA: 3,1 million Downtown Apartment Buildings 33% Landmark Apartments 2% Residential Apartment Buildings 7% Duplex 4% Strip Mall 2% Medical 2% Auto Mall 2% Luxury Residential Apartment 14% Offices 16% Villas 3% Large Villas 1% Commercial 14% Hotels 2% 13
Master plan approved (designed by Benoy) and Egyptian ministerial decree issued approving the master plan Up to 30% foot print Infrastructure and utilities are under discussions with New Urban Communities Authority (water and sewage approved, electricity under discussion with the North Cairo Electricity Company) Hydrogeology studies and investigation finalized to inspect natural water feature Co-Development agreement signed with Palm Hills Development on 433,643 m 2 for 36% of revenues. Project launched in 4Q2015 sold 565 units to date MNHD launched S1 in November with phase 1 selling out in 24hours (EGP 1.0bn) MNHD launched S2 in February with phase 2 selling out within 1 week (EGP 1.7bn) 5.5 million m 2 closest to the new administrative capital MASTER PLAN SPECIFICATIONS GLA: 5.5 million BUA: 5.2 million Commercial & Facilities 11% Retail Area 7% Leisure 2% 14 Residential Area 80%
Development Projects 15 2017 MNHD.
MNHD Project Segmentation Zone T Zone B Unlaunched Residential Unlaunched Commercial Total Total BUA (SQM) 304,175 275,000 413,000 1,318,000 588,100 2,898,275 Date of Launch 2012 2015 2018 - - Total # of Units 1,763 1,521 3,341 8,786¹ - % Sold 98% 90% 4% - - Avg. EGP/SQM 7,295 18,975 19,452 19,254² 45,000 Value of Inventory EGP 2.2bn EGP 5.2bn EGP 8.0bn EGP 54bn EGP 51bn ¹ Assuming an average unit size of 150sqm ² Weighted Average of BUA sold in 2018 16
MNHD Project Segmentation S1 S2 S3 Capital Gardens Unlaunched Residential Unlaunched Commercial Total Total BUA (SQM) 229,365 645,000 65,000 484,100 2,909,000 1,028,700 5,361,165 Date of Launch 2016 2017 2018 2016 - - Total # of Units 1,208 3,547 260-19,393¹ - % Sold 48% 36% 7% - - - Avg. EGP/SQM 15,603 14,689 30,400-14,430 30,000 Value of Inventory EGP 3.6bn EGP 9.5bn EGP 2.0bn - EGP 162bn EGP 68bn ¹ Assuming an average unit size of 150sqm 17
MNHD Project Segmentation FULL SPECTRUM OF OFFERING Company Developments Target Market Socio-Econ Upper Income (A+ / A / A-) Upper Middle Income (A-) Middle Income (B) Low Income (B-/C) Yearly Income Range EGP 1,000K 6,000K EGP 300K 1,000K EGP 60K - 300K EGP 15K - 60K Range of Price / m 2 EGP 18K - 22K EGP 11K - 15K EGP 6K - 7K EGP 2K - 2.4K Estimated Price / Unit EGP 1,600K 7,000K EGP 750K 3,500K EGP 800K 1,000K EGP 125K - 135K 18
MNHD Latest Developments 60,000 SQM RESIDENTIAL CLUSTER INSIDE SHALYA 60SQM 185SQM AREA RANGE OF UNITS 42,429SQM OF TOTAL BUA 67,384SQM SOLD AVG. SQM PRICE OF 19,100EGP TOTAL SALES AND PRE SALES OF EGP 1.8BN (24% OF TOTAL INVENTORY)
MNHD Latest Developments HOME TO CAIRO S BIGGEST LAGOON 56SQM 181SQM AREA RANGE OF UNITS TOTAL OF 344 UNITS OFFERED TOTAL PRE SALES AND SALES OF EGP 238MN (49% OF TOTAL INVENTORY) AVG. SQM PRICE OF 14,672EGP
The S Villa New Innovative Product Offered by MNHD in SARAI The S Villa is a new product offered by MNHD in SARAI The S Villa uses one plot of land to host 2 villas Each Villa has its own garden and view while the top villa also has a penthouse S Villas give the convenience and privacy of villas but at the price of town houses 21
MNHD Latest Developments 82,517SQM. TOTAL BUA INSIDE SARAI OVERLOOKS 50,000SQM. LAGOON SPREAD ACROSS SARAI 257 TOTAL NUMBER OF UNITS INVENTORY WORTH EGP 2,536MN AVG. SQM PRICE OF EGP 30,517
392 Units in the First Gated Compound in Nasr City (Hayy Al Waha) Quick Facts: Type: Primera is the first gated community located in the heart of Nasr City (in Hayy Al Waha) close to the ring road. The compound is spread over 10,322m² with various unit sizes # of Units: 392 units (90% Sold) Apartment Area Range: 85m²-185m² Avg. Price/m²: EGP 4,600 Construction Period: from 12-18 months Delivery Date: October 2015 Completion Date: 2016 Installment Period: Up to 9 years
2,040 Low Income Housing Units Quick Facts: Type: Low income housing apartment buildings (G+5 floors) # of Units: 708 units constructed Average Unit Area: 63m² Avg. Price/m²: EGP 2,300 Delivery Date: Starting 2016 Completion Date: 2017 Infrastructure: government resumed infrastructure connections 24
Strategic Planning & Turnaround Highlights 25 2017 MNHD.
Impact on short term profitability MNHD Strategic Planning Matrix High Max Asset Use Capture Value Chain Performance Management SALES Enter into strategic planning for the turn around phase from 2010 MHND focused on generating sales Boosting sales will help short term profitability as well as long term goals for MNHD Improving Subsidiaries Penetrate Low Income Housing Expand Land Bank Other areas to consider are improving the profitability of subsidiaries as well as expanding the land bank Low Impact on long term profitability High 26
MNHD Subsidiaries Overview Brief Overview Nasr Civil Works The company was founded in 1965 Executes civil construction work 1st class in civil works It is a listed company with a total market cap of EGP 100 Million (as of 10th August 2015) Nasr Utilities & Installations The company was founded in 1964 Specialized in civil construction, supply and installation of mechanical equipment for sewage and water plants MNHD Ownership 51% 98% MNHD Ownership It contributes around EGP 20-25 million of net income to MNHD consolidated books It acts as an in-house contractor Current contribution to net income is negligible Acts as the in-house infrastructure contractor to MNHD MNHD Ownership Plan to improve the human capital through an active hiring strategy and training programs Performance management system and salary restructuring will be implemented soon 27 A new management team has been put in place to lead the turnaround process under close supervision and support by MNHD s management I. Cash management II. Weekly meetings III.MNHD committee to lead the turnaround IV.Awarding the company with projects that will improve their financial position (close supervision to ensure quality and improve operations) V.New organizational structure with new experienced hires to the turnaround
Financial Summary 28 2015 MNHD.
MNHD Consolidated Income Statement EGP Thousands 2013 2014 2015 2016 2017 9M 2017 9M 2018 Net Revenues 718,540 743,850 771,466 2,014,425 2,428,257 1,710,435 2,059,866 Growth 45% 4% 4% 161% 21% - 20% COGS (391,316) (355,242) (365,416) (658,584) (840,532) (539,221) (672,107) Gross Profit 327,224 388,608 406,050 1,355,841 1,587,725 1,171,214 1,387,759 Gross Profit Margin 46% 52% 53% 67% 65% 68% 79% Selling and Marketing Expenses (37,275) (34,822) (47,158) (133,937) (252,810) (136,423) (144,355) General and Administrative Expenses (45,554) (55,815) (60,699) (68,133) (98,354) (51,582) (61,419) Depreciation (3,656) (3,897) (4,482) (2,762) (3,596) (6,173) (7,715) BOD Expenses (4,280) (4,829) (8,731) (5,197) (10,212) (6,070) (6,547) Provisions (4,827) 1,057 13,446 (117,423) (31,320) (4,566) (9,210) Operating Profits 231,632 290,302 298,426 1,028,389 1,191,433 966,400 1,158,513 Finance Costs (7,177) (9,050) (10,319) (11,076) (28,371)(17,483) (91,627) Capital Gain - - 2 175 - - 4 Investment Income (Loss) - 7,317 17,118 12,651 6,134 50 48 Other Costs (6,030) (5,440) (4,645) (29,265) (38,669) (33,414) (14,112) Interest Income 8,976 13,581 11,378 7,799 25,965 22,503 27,990 Other Income 19,719 4,011 17,285 23,010 46,226 32,733 37,878 Net Profit Before Tax 247,120 300,721 329,245 1,031,683 1,202,718 970,789 1,118,694 Income Tax (60,019) (88,066) (68,980) (264,668) (272,442) (213,602) (247,083) Deferred Tax (220) 511 (1,571) 1,887 2,778 (36) (2,539) Net Profit After Tax 186,881 213,166 258,694 768,902 933,054 757,151 869,073 Minority Interest (10,904) (10,409) (5,988) (2,325) (1,432) (1,763) (28,770) Net Profit After Minority 175,977 202,757 252,706 766,577 931,622 755,388 840,302
MNHD Consolidated Balance Sheet EGP Thousands 2013 2014 2015 2016 2017 Q3 2018 Cash 122,250 212,283 104,444 152,563 268,983 527,052 Investments and Marketable Securities 83,699 100,536 243,725 264,451 217,872 293,765 Inventory 427,063 553,330 839,926 1,073,748 1,412,190 1,418,740 Receivables 942,454 910,689 1,201,343 1,576,872 2,296,377 2,737,324 Letter of Guarantee Coverage 12,927 14,905 9,962 10,865 10,330 10,291 Debtors and other Debit Balances 31,994 138,808 248,693 283,645 400,299 431,379 Total Current Assets 1,620,387 1,930,551 2,648,093 3,362,144 4,606,051 5,418,551 Work in Progress 16,384 17,224 18,255 15,746 12,927 17,263 Long-Term Receivables and Debit Balances 1,738 920,431 2,972,920 5,144,995 5,950,950 Deferred Tax 8,354 8,866 7,295 9,182 11,960 9,421 Total Long-term Investments 15,287 15,286 12,157 14,871 15,722 17,839 Net Fixed Assets 29,790 31,446 45,741 49,716 54,661 54,941 Total Long-Term Assets 71,553 72,822 1,003,879 3,062,435 5,240,265 6,050,414 Total Assets 1,691,940 2,003,373 3,651,972 6,424,579 9,846,316 11,468,965 Banks - Credit Facilities & Short Debt 6,472 22,636 35,533 44,593 187,680 272,003 Current Portion of Long Term Loans 4,239 4,258 4,278 4,298 177,893 160,648 Provision for Claims 67,165 60,999 46,741 131,893 128,641 129,988 Completion Liabilities 50,024 83,973 132,011 169,429 170,827 127,114 Deferred Profits & Interests 355,074 366,988 350,065 304,950 226,811 - Dividends Payable 4,289 3,839 4,320 3,706 6,962 19,585 Creditors & Other Credit Balances 381,915 371,798 1,455,542 87,177 79,188 49,538 Tax Authority - - 74,133 278,113 296,710 269,199 Liabilities For Project Maintenance - - 47,422 111,407 192,402 282,379 ST Notes Payable 33,164 84,885 88,752 55,502 150,411 92,079 Accounts Payable 110,176 145,365 311,616 339,151 447,911 402,162 Total Current Liabilities 1,012,518 1,144,741 2,550,413 1,530,219 2,065,436 1,804,695 Long Term Notes Payable 26,235 - - 2,942,735 5,119,127 6,332,434 Long Term Debt 16,460 37,269 68,969 259,283 207,153 103,703 Long Term Liabilities 42,695 37,269 68,969 3,202,018 5,326,280 6,436,137 Paid-in-capital 135,000 199,285 250,000 500,000 997,100 1,200,000 Treasury Shares - - - (74,633) - - Reserves 57,398 65,387 74,725 86,375 123,314 170,479 Net Profit of the year 175,977 202,758 262,099 766,575 931,621 840,303 Retained earnings 211,728 288,747 377,463 344,351 332,036 918,232 Minority Interest 56,627 65,186 68,301 69,672 70,527 99,119 Shareholders' Equity 636,730 821,363 1,032,588 1,692,340 2,454,598 3,228,133 Total Liabilities and Equity 1,691,943 2,003,373 3,651,970 6,424,577 9,846,314 11,468,965
31 Thank You