TMG HOLDING INVESTOR PRESENTATION SEPTEMBER 2017
Disclaimer Certain information disclosed in this presentation consists of forward looking statements reflecting the current view of the company with respect to future events, and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking statements, including worldwide account of trends, economic and political climate of Egypt, the Middle East, and changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those described in such forward looking statements. 2
Outline Ø 1- TMG Corporate Profile Ø 2- Market and Operational Review TMG at a Glance. Macroeconomic Indicators, Real Estate Drivers. Projects Development, Achievements and Growth Prospects. Financial and Operational Review, Hotels & Resorts Operational Review. Share Data. Ø 3- Future Growth Board of Directors and Corporate Real Estate Development Plans And Projects Governance, Executive Team and Progress. Business Partners. Real Estate Future Growth. Strategy and Business Model, Quality Hotels & Resorts Future Growth. Control and Operating Systems. Ø 4- Investment and Risk Considerations 3
1. TMG Corporate Profile TMG at a Glance. Projects Development, Achievements and Growth Prospects. Share Data. Board of Directors and Corporate Governance, Executive Team and Business Partners. Strategy and Business Model, Quality Control and Operating Systems. 4
TMG at a Glance (TMGH.CA) Different styles and size of units that cater to changes of income levels, average household size, life style and consumer preference. Four operational large scale luxury hotel complexes including high-end residencies, shopping malls and office parks and soft launch of a fourth boutique hotel specifically tailored to business travelers. A sales backlog of EGP 28 BN at the end of September2017. Healthy financial position and minimal gearing: cash EGP 6.7 BN, debt EGP 5.7 BN, debt to equity ratio of 1:5 as at September2017. 5
CITES & COMMUNITIES 6
HOTELS & RESORTS 7
Projects Development TMG Project Overview Completed Projects Virgenia Beach Al Rabwa 1 Four Seasons Sharm El Sheikh. Kempinski Nile Hotel. Mayfair Al Rehab 1 ( phases: 1,2,3,4,5) Four Seasons Nile Plaza. Al Rabwa Al Khadra Four Seasons San Stefano Under Construction Projects Madinaty Al Rehab 2 Al Rehab 1 ( phases 6) Al Rabwa 2 Under Development Projects Extension Four Seasons Sharm El Sheikh Four Seasons, Madinaty Four Season Luxor Marsa Alam Resort TMG Hotel & Building 8
Achievements Break of Sold Unit 0.54% 0.37% 0.95% 0.48% 1.36% 0.05% 0.18% Sold over 77.6 thousand residential units. 14.45% Developed over 9.6 MNSQM. residential BUA. 47.83% Sold 45.7% of Madinaty residential BUA, 97.6% 34.13% of Al Rehab II and 99.7% of Al Rabwa II units. Award winning operational hotels. virgenia May fair Rabwa Rabwa ii Sant stefano Four S. Sharm Nile Plaza Rehab ii Rehab i 9
Growth Prospects Breakdown of Land Bank Development rights of 45.4 MN SQM in Egypt. Master development of 6 MN of quality land for strategic non-residential developers for value creation and knowhow. 9% Sales backlog of EGP 28 BN to be delivered and recognized over next four years. 1,780 hotel keys and 2,464 attached residential units in various design and development stages, upcoming in next three to four years. Increase contribution of stable income from operating assets to reach 35% of total revenue (a target of 5,000 hotel rooms). Maintain minimum of 35 MN SQM of land inventory through on going local expansion. City & Community 91% Hoteles & resorts 10
Share Data Free Float 56.84% Shareholders Structure TMG RE & Tourism Investment 43.16% *Including Talaat Mostafa Family and Others 450 440 430 420 410 400 390 380 370 360 350 340 330 320 310 300 290 280 270 260 250 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 Share Performance EGX RE INDEX TMG 29.12.11 15.2.12 28.3.12 15.5.12 27.6.12 12.8.12 25.9.12 11.11.12 24.12.12 7.2.13 21.3.13 8.5.13 6.19.13 8.4.13 9.18.13 11.7.13 12.19.13 2.4.14 3.18.14 5.5.14 6.18.14 8.6.14 9.17.14 11.3.14 12.15.14 1.29.15 3.12.15 4.27.15 6.8.15 7.27.15 9.8.15 10.27.15 12.8.15 1.21.16 3.6.16 17.4.16 1.6.16 19.7.16 30.8.16 18.10.16 29.11.16 12.1.17 26.2.17 9.4.17 25.5.17 12.7.17 24.8.17 12.10.17 11
Board of Directors and Corporate Governance Executive and non-executive members with longstanding experience in real estate and construction in the MENA region. Independent and non executive members that are publicly renowned in the economic, legal and commercial circles. Audit, nomination and remuneration committees have been appointed. The audit committee has the responsibility to review and approve related party transactions. Directors are bound by non-compete rules in Egypt. Tarek Talaat Moustafa (Chairman) Hisham Talaat Moustafa (CEO) Hani Talaat Moustafa Yehia Mohamed Awad Mohamed Ali Akbar Mohamed Shawky El Sayed Howayda Huessin- Misr Insurance Company representative Hany Sarie-Eldin Mohamed Abdel Aziz Board of Directors Hossam Abdallah Helal (Chairman of the audit committee) 12
Executive Management In addition to the board, the executive management of the company is composed of 9 Vice Presidents. A number of committees including the Steering Committee, Higher Management Committee and Executive Committee support the Management decision making process. Over 3000 professionals are directly employed in the various sectors and subsidiary companies of the Group. In addition, a workforce of approximately 60,000 technical staff is operational in the various projects sites. Managing Director & Vice Presidents Hisham Talaat Mostafa (Managing Director) Sherif Ghoneim V.P. Sales and Marketing, Joined: 1993 Jihad M. Sawaftah V.P. Chief Financial Officer, Joined: 2004 Gamal El Guindy V.P. Administration of the Chairman s Office, Joined: 1983 Ahmed Afifi V.P. Madinaty Project Management, Joined: 1995 Mohamed Atef V.P. Technical Affairs, Joined: 2005 Wael EL Dieb V.P. Projects Management, Joined: 2014 Sami Mokhtar V.P. San Stefano Project, Joined: 1992 Mohamed Al Shazly V.P. Sales, Joined: 2001 Mohamed M. Noh V.P Real Estate Affairs, Joined : 1980 13
Business Partners The Four Seasons and Kempiniski :internationally reputable management chains of our hotels Top class worldwide contractors, master planners, designers of projects components and execution: Main contractor for our completed projects as Joannou and Paraskavides, Hyundai, Murray and Roberts and Bin Laden. The master planning of Madinaty was made by a group of consulting firms from the United States: Sasaki, SWA and HHCP and their Egyptian counterparts Cairo Group for planning and architecture. Architects as HKS, USA for Sharm extension design WZMH, Canada for Luxor design, Studio Sergi, Italy for Marsa Alam design. MEP companies as MMM Canada for Sharm extension. Interior design companies as GA, UK for Luxor Signature golf courses designers as Robert Trent Jones II and HHCP Design International. 14
Strategy and Business Model Geographical diversification Integrated Development concept Integrated process capitalizing on brand name, reputation and experience Stable and recurring income from Operating assets Scale and Land bank positioning In-house Centralized Operations Top Class Designers and Contractors Reputable Business Partners flexible phasing self financing real construction model estate units sales Flagship Developments financing schemes catering to customers affordability Low risk,model: (sell first then construct) Ongoing after sale integrated facilities management operations 15
Quality Control and Advanced Operating Systems 2007: Application of the SAP Enterprise Resources Planning System (ERP) on all functions of the Group Subsidiaries. The result is a smooth process integration between sales, accounting and treasury, with facilitated financial and managerial reporting, streamlined accounting bookkeeping and consolidation, improved administration of internal controls, corporate governance and transparency, and an optimized cash management process. Feb 2008: qualified for the ISO 9001:2000 certification requirements for a quality management system and maintained the certificate upon renewal in 2010 where an organization: 1. needs to demonstrate its ability to consistently provide product that meets customer and applicable regulatory requirements, and 2. aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable regulatory requirements. 16
2. Market and Operational Review Macroeconomic Indicators Real Estate Market Drivers Financial Review Consolidated Operational Review Hotels & Resorts Operational Review 17
Macroeconomic Indicators Real GDP growth was 3% during the (July, March) 2016-2017 compared to the same period last year; after changing the base year from 2006/2007 prices to 2011/2012 prices; Net International Reserves reached US $ 36 BN at the end of August, 2017. Annual headline inflation rate reached 32% in August, 2017. The CBE announced that the overnight deposit rate will be at 18.75 %, and the lending rate at 19.75% during September, 2017. 18
Real Estate market drivers in Egypt Population basics Resident population at 95mn, as per latest census Graduates from local universities Public Institutes Private Annual marriage and divorce rates support long-term demand outlook Marriages Divorces Population growth at 5x that of developed and 2x of other developing countries 18-29 years old represent 24% of population 27% live in urban areas Population expected at 140mn by 2030 77% of the population occupies only 5% of the country s area, one of the lowest worldwide Proxy demand and supply indicators point to a significant gap c350k youths annually graduated from local universities in 2005-2016, over 25k obtain master and doctoral degrees per annum c940k marriages and c192k divorces in 2016, creating demand for new dwellings ['000 graduates] 500 400 300 200 100 0 2009 2010 2011 Source: CAPMAS Note: Data beyond 2015 not available at source as of October 2016 2012 2013 2014 2015 ['000 cases] 1,200 1,000 800 600 400 200 0 2004 2005 2006 2007 2008 Source: CAPMAS Note: Increasing divorce rates contribute positively to rental, secondary demand 2009 6.0% CAGR Branded supply over the next 3 years will not exceed 11-20k units in Cairo and Giza, leaving a significant and long-term supply/demand gap 2010 2011 2012 2013 2014 2015 2016 c209k marriages in Cairo/Giza in 2016 Stock Incremental supply High-ARPU mobile subscriptions at c15% of total market At least 30k marriages per annum in Cairo/Giza where the female has higher education (potential indicator of middle/upper-middle real, branded demand) Market-wide investment demand historically at c20% of volumes, creating potential for another c8k dwellings per annum Family formation, outward migration and investment needs create total demand for c30-50k branded units per annum, c30-60% of which remains unfulfilled ['000 units] 200 150 100 50 0 11 11 11 13 148 8 137 20 126 105 113 85 85 2013 2014 2015 2016 2017e 2018e 2019e Source: JLL MENA, TMG 19
Real Estate market drivers in Egypt Remittances from expat population supportive to local property demand Almost 1 in 10 Egyptians resides abroad, non-resident population at c10mn, as per latest census Over 2/3 of Egyptian expats visit the country at least once per year EGP devaluation in November 2016 lowered unit acquisition costs by c30% in USD-terms despite subsequent price increases, improving its appeal Quarterly remittances in USD-terms remain unchanged Recent EGP appreciation (8% since 2016 peak) is likely supportive to immediate demand, accelerating purchase decisions Expected declines in interest rates in 2018 should fuel the property market with additional liquidity CBE discount rate at 19.25% since May 2017, the highest since 1992 Reactionary increases of retail deposit rates to 16% and 20% for 3-year and 18-month certificates locked significant liquidity in the in the banking system, in excess of EGP300bn Market-wide consensus on gradual declines to interest rates suggests additional liquidity fueling the market starting 2018 and peaking by 2019/2012 Last low interest rate environment in 2000 s (CBE discount rate at 10%) coincided with last real estate boom [USDbn] 6 5 4 3 2 1 0 Remittances exceed USD17bn per annum 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Source: CBE Note: Quarterly, for fiscal year ending June FX dynamics are supportive of additional expat demand [USD:EGP] 25 20 15 10 5 0 Source: CAPMAS Note: Data beyond 2015 not available at source as of October 2016 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Historical CBE discount rates 25% 20% 15% 10% 5% 0% Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Source: CAPMAS Note: Increasing divorce rates contribute positively to rental, secondary demand Jan-05 Jan-07 Jan-09 2Q17 Jan-11 3Q17 Jan-13 Jan-15 4Q17 Jan-17 20
Financial Review 9M 2017 Key figures Total assets: EGP 72 BN Cash and cash equivalents: EGP 6.7 BN Total debt: EGP 5.7 BN A positive net Cash: 1 BN Debt to Equity Ratio: 1:5 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Assets Growth - 1Q2008 4Q2008 4Q2009 4Q2011 4Q2012 4Q2013 4Q2014 3Q2017 21
Financial Review Revenue Contribution 9M 2017 Quarterly revenue recognition Other Revenue 6% 3,000 2,750 Hotels 15% 2,500 2,250 2,000 1,977 2,353 1,750 1,500 1,250 1,286 Residential 79% 1,000 750 500 1Q2017 2Q2017 3Q2017 Consolidated revenue 22
Consolidated Operational Review Revenue Contribution 9m 2017 1Q2017 2Q2017 3Q2017 9M2017 Revenues breakdown Revenues from units sold 956 1,609 1878.7 4,443 Revenues from Hotels 237 256 326.68 820 Other revenues 93 112 147.44 352 Total consolidated revenue 1,286 1,977 2,353 5,616 COGS breakdown Real Estate & Construction Cost (562) (1,057) (1,273) (2,892) Hotels Cost (154) (163) (197) (515) Services Cost (64) (82) (134) (280) Total cost of goods sold (780) (1,302) (1,604) (3,686) Gross profit 506 675 749 1,930 GP% 39% 34% 32% 34% SG&A, Other income and expenses (123) (215) (287) (625) Net profit before tax 383 460 462 1305 NPBT% 30% 23% 20% 23% income tax and deferred tax (78) (69) (51) (197) Net Profit 305 391 411 1107 NP% 24% 20% 17% 20% Minority's share (17) (7) (24) (49) attributable to shareholders 289 384 386 1059 22% 19% 16% 19% Quarterly profits - 500 1,000 1,500 2,000 2,500 506 1Q2017 383 289 675 2Q2017 460 384 749 3Q2017 462 386 1,930 9M2017 1,305 1,059 Gross profit Net profit before tax Net profit 23
Hotels & Resorts Operational Review ARR and Rev Par 300 250 200 150 100-50 203 110 9m17 combined ARR 281 141 9m16 Nile Plaza Total Revenue (EGP Mn) 600 550 500 450 400 350 300 250 200 150 100 50 0 52% 51% 456 9m17 321 9m16 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% GOP % Total Revenue (EGP Mn) San Stefano 200 180 160 140 120 100 80 60 40 20-38% 145 9m17 39% 109 9m16 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% GOP % Total Revenue (EGP Mn) Sharm El Sheikh 200 180 160 140 120 100 80 60 40 20-20% 126 9m17 7% 73 9m16 25% 20% 15% 10% 5% 0% GOP % 24
3. Future Growth Real Estate Projects Progress. Real Estate Future Growth. Hotels and Resorts Future Growth. 25
3. Future Growth Real Estate Development Hotels & Resorts Capitalizing on land-bank in existing projects. Master Development and sale of prime land plots; value created through project development and units delivery over 10 ten year period. Looking for worthwhile opportunities to expand landbank in Egypt. Expanding in the region with an eye on markets of shared similarities with the Egyptian real estate markets. The target is to have a minimum land-bank of 35 MN SQM at any point of time. The target is to build a stock of 5,000 hotel rooms with a minimum IRR of 18%, and increase the contribution of stable income to 35% of total revenue Development of hotel projects in the pipeline, early launch of real estate sales to co-finance development and enhance returns Continue to grow through purchase of minorities when the opportunity arise Looking for further local opportunities that enjoy prime location and have a market gap to increase weight of stable income from hotels operations. 26
MADINATY 27
Madinaty: development progress Key statistics Location New Cairo Total land size (m2) 33,600,000 BUA to be dev. (m2) 20,856,908** Land for mega developments 7,450,380 Expected population 600,000 Commence date July 2006 % of sold residential BUA: 45.7%* Madinaty - % of Sold Residential BUA Available for sale 54.3% Sold BUA 45.7% * As per revised program area of April 2013 ** Including estimated BUA on land for mega developments 28
Madinaty: development progress Project description Mix-use community designed by three prominent American companies Construction is to take place over 6 overlapping phases, each 3-4 years long Intended residential BUA of 16.82 million m2 In addition to business district, international hospital, a university, 22 schools and 3 shopping malls 29
Madinaty: progress to date (30-9-2017) Updated Sep 30, 2017 Infra structure work 21.25 MN m2 of Land levelling and roads preparation 8.85 MN m2 of roads levelling work 5.15 MN m2of base and sub base layers 465 km of borders works 3.51 MN m2 of asphalt work 750 km length of water, sewage and irrigation water pipes 5.03 MN of electricity cables 475 km of telephone cables Updated Sept. 30, 2017 Residential BUA work 12.5 MN m3 of digging and filling 2.30 MN tons of cement 575 000 tons of steel 6.21 MN m3 of concrete 16.67 MN meters of walls 9.98 MN meters of ceramics 1086 k meters of marble 22.32 MN meters of paints 789 k pieces of windows and doors 30
MADINATY Residential Units 31
Madinaty Phase I Delivering residential units with completed community services Key statistics Residential land area (m2) 9,358,440 Facilities land area 2.456,534 Residential BUA 4,270,275 Expected population 68,620 Commence date Jan 2007 Delivery date April 2010- Dec 2014 USE Area Fadden Gross Land Area m2 Built Up Area total units Zone 1 Apartment 266.5 1,119,300 1,111,754 6,524 Zone 2 Apartment 128.5 539,700 578,388 3,724 Zone 6 Apartment 245 1,029,000 1,141,378 10,350 Total Apartment 640 2,688,000 2,831,520 20,598 Zone (I)Villa Golf 506.7 2,128,140 391,763 1,105 Zone (II)Villa Golf 698 2,931,600 564,848 1,381 Zone (4)Villa 146 613,200 145,332 454 Zone (5)Villa 237.5 997,500 336,812 1,455 Total Villas 1588.2 6,670,440 1,438,755 4,395 32
Madinaty Phase II Delivering residential units with completed community services Key statistics Phase 2 Residential Units to be Delivered Residential land area (m2) 3,135,300 Facilities land area 315,810 Residential BUA 3,133,423 Expected population 67,192 Commence date March 2008 Delivery date April 2010- Dec 2014 Land Use Area / feddan Area / m2 Total BUA / m2 No. of Unit Zone 3 Apartment 166 695,100 655,464 3,864 Zone 7 Apartment 147 617,400 628,847 7,272 Zone 8 Apartment 227 951,300 911,359 4,554 Zone 11 Apartment 208 871,500 937,753 8,340 Total Apartments 748 3,135,300 3,133,423 24,030 33
Madinaty Phase II Delivering residential units with completed community services Services: Northern District Services: Southern District Other Facilities USE Area Fadden Gross Land Area m2 USE Area Fadden Gross Land Area m2 Land Use Area / Fadden Area / m2 Language School 6.59 27,668 British School 7.17 30,133 Medical Center 2.70 11,340 Bank Complex office 2.35 9880.43 Fire Station 0.36 1,527 Mosque 2.32 9,730 park and parking 18.38 77,196 Total area 39.88 167,474 Retail (Restaurant, Commercial, etc) 8.77 36,834.00 Experimental School 4.09 17167.47 Buss Station 0.97 4,073.33 Medical Center 1.52 6,384.00 Telephone Exchange 1.60 6,733.33 Admin Building 0.76 3,210.00 Police Station 0.70 2,950.00 Municipal Building 0.52 2,166.67 Mosque 2.14 9,006.67 Park and parking 19.22 80,724.00 Total area 40 169,249 Phase 1 of sports club 203 852,600 District centers 13.47 56,561 Regional Services 273.9 1,150.380 Roads and City utility 14.35 60,270 Total 2,119,811 34
Madinaty Phase III Delivering residential units with completed community services Key statistics Services: District centre Phase 3 Residential Units to be Delivered Residential land area (m2) 4,863,600 Facilities land area 2,182,943 Residential BUA 3,801,999 Expected population 67,192 Land Use Area / Feddan Area / m2 Commercial 0.71 3,000 Day care 0.40 1,667 Admin 0.40 1,667 Mosque 1.19 5,000 Green areas & parking 3.30 13.860 Land Use Area / feddan Area / m2 Total BUA / m2 Mixed used 200 840,000 2,268,000 No. of Unit 15,120 Zone 10 Apartment 220 924,000 969,151 7,320 Total apartment 420 1,764,000 3,237,151 22,440 Zone (III)villa golf 738 3,099,600 564,848 1,027 Regional services 499.4 2,097,480 Roads and City utility 14.35 60,270 Total 519.7 2,182,943 35
Al REHAB 36
Al Rehab Development Progress Key statistics* Al Rehab II - % of Sold Residential BUA Location: New Cairo, an extension to Al Rehab I Total land size (m2) 9,900,400 Land size to be dev. (m2) 4,684,225 BUA to be dev. (m2) 2,839,834** Land for mega developments (m2) 687,971 Expected population 200,000 Commence date Nov 1996 / Jul 2006 % of sold residential BUA (Rehab II) 97.65% 1. Rehab I / Rehab II 2.35% Available 97.65% BUA sold Project description Al Rehab I: Only the shopping centre and phase 6 villas (633 villas) are yet to be completed. Out of which 22 villas are remaining to be sold. Rental revenue from two shopping malls (6,274 SQM) the British school as well as club fees (membership fees) and F&B. Al Rehab II: Consists of villas (BUA 0.401 million m2), apartments (BUA 1.389 million m2). * As per revised program area of November 2009 ** including estimated BUA on land for mega developments. 37
AL RAWA 38
Al Rabwa Development Progress Key statistics* Al Rabwa II - % of Sold units Location: Sixth of October City an extension to Al Rabwa I Total land size (m2) 2,137,828 Land size to be dev. (m2) 819,028 (Al Rabwa II) BUA to be dev. (m2) 129,748 (Al Rabwa II) Expected population 4,965 Commence date January 2006 % of sold residential BUA (Al Rabwa II): 99.7% 0.3% Available 99.7% BUA sold Al Rabwa I an exclusive compound targeting the high end. Construction is completed and consists of 648 villas, a shopping centre, 9 hole golf course and sports pavilion. The development is fully sold and covers a land area of 1,318,800 m2. Al Rabwa II Al Rabwa II will follow a similar model consisting of 386 villas and an interlinking 9 hole golf course. Only 2 villas are remaining to be sold. Project description 39
Real Estate Future Growth: Capitalise on Land with unrecognized value 2010 Delivery of residential units completed with facilities and infra structure in Rehab II and Madinaty 2012 2022 Master development and sale of SQM 8.14 MN land plots in prime locations for strategic non residential use 2012 2022 Estimated land sale of 500ksqm/annum at an estimated selling price of EGP 10K/SQM Master planning and development of high quality land plots all set with the required infrastructure. Land value created as a result of the development progress and delivery of a full-fledged phase of the project. To be sold to strategic partners that would bring a know-how, fill an existing gap in the area; e.g. medical projects, banking corporations, large exhibits, key service providers, etc. The plan is to create more value to the project, enhance the operational cash flow and achieve more favourable project s returns. To be launched over a 10 years period starting 2012 after delivery of phase I units at an estimated average selling price of EGP 10,000 per SQM. 40
Real Estate Future Growth: Location of Land with unrecognized value Al Rehab Madinaty 41
Hotels & Resorts Future Growth: Business line Diversification to increase the contribution of stable income to total revenue Targeted Future Growth Reach 5,000 hotel rooms with a minimum IRR of 18%, and increase the contribution of stable income to 35% of total revenue. Steps taken to achieve targeted growth Acquisition of Marsa Alsadeed land in Sharm El Sheikh, upon which an extension of the existing Four Seasons resort will be constructed. Purchase of land in downtown Cairo to develop a high-end office and hotel complex. Purchase of Sednawy Villa adjacent to the Nile Hotel to develop an exclusive business club and parking that will also serve the hotel. Obtained a 50 years renewable concession agreement to develop a resort on Sultana Malak Land in a prime location in the historic city of Luxor. signed up Letters of Intent with the Four Seasons renowned chain to operate the hotels in Luxor, Madinaty, and Sharm Extension and appointed Kempinski to operate the Nile hotel. Raised ownership stake to 100% of the Four Seasons Sharm el-sheikh Resort and Four Seasons Nile Plaza complex in Cairo by acquiring the minority stake held by Kingdom Hotel Investments (KHI) in both hotels. 42
Build-up of 2,655 hotel rooms Operational: 875 rooms / keys Under development: 1,780 rooms / key 2001 Four Seasons Sharm 2004 Nile Plaza 2007 San Stefano 2010 Kepminski Nile Hotel 2019 Four Seasons Sharm Extension 2020 Four Seasons Madinaty 2021 Four Seasons Luxor Marsa Alam 2022 2023 TMG Building Hotel 200 566 684 875 974 1254 2254 2455 2655 43
Upcoming projects Open Air Mall Consists of 9 Buildings Design was made by F+A architects Land area: 404k SQM BUA: 116k SQM Development Progress To be developed over 3 phases Opening target date 2018-2020 Four Seasons Sharm Extension Rooms/ keys : 99 Residential properties: 114 Operator: Four Seasons Land area 960k SQM BUA: 490 k SQM Development Progress Purchased land. Finished design. Issued licenses and permits. Appointed four seasons management company. Under Construction. 44
Upcoming projects Four Seasons Luxor Rooms/ keys: 201 Operator: Four Seasons Land area 20k SQM BUA: 43k SQM Four Seasons Madinaty Rooms/ keys: 240 Residential properties: 100 Operator: Four Seasons Land area 175k SQM BUA: 49k SQM Development Progress Signed concession agreement. Finished design. Issued licenses and permits. Appointed four seasons management company. Floated tender documents. Development Progress In the design process Appointed four seasons management company. 45
Upcoming projects Marsa Alam Rooms/ keys :1000 Residential properties: 2250 phase one : 474 units Land area 3.2 MN SQM BUA: 390k SQM Madinaty Medical City Rooms/ beds:450 Contains Hospital, Children and Women Hospital, Cancer Research centre, Transplantation centre, and Outpatient Clinics. In addition to Academy and a Hotel. TMG Building Hotel Rooms/ keys :200 Operator: TBD Land area 2k SQM BUA: 16k SQM Development Progress Purchased land Finished design Obtained TDA approval Issued licenses and permits Development Progress To be developed over 3 phases Phase 1 includes Main Hospital with 220 beds Opening target date 2017 Development Progress Purchased land Finished design Issued licenses and permits 46
4. Investment Considerations Real Market need Concept and selling features Experience and Track Record Investment Considerations Integrated low risk, self finance Business Model Diversified products and markets Guaranteed revenue and profitability (sales backlog) Healthy financial Position High Growth Prospects 47
Risks and Mitigates Risks Competition from new entrants Failure to achieve overall growth target Mitigates Entry barriers to prospective new comers: Integrated Business Model. First mover advantage. A diversified growth plan with no over-dependence on one revenue segment.; Revenue growth in one segment is likely to offset sluggish growth in another. New products and land development ideas. Difficulty to attract customers to the new product idea Economic Slowdown Product features that meet customers needs and affordability. A carefully planned promotion strategy that aims at introducing the product idea and publicizing its value to the target market. A safety cushion of a sales backlog that exceed EGP 18.8 bn to be recognized over next four years Stable income from operating assets Entering new markets with high growth potential 48
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