investor presentation - amazon s3 investor presentation 2014-11.pdfsodic is amongst egypt’s...

Investor Presentation

November 2014

All figures as at end of 30 September 2014, unless otherwise stated

Outline

1. Introduction

A. Executive Summary

B. Key Investment Highlights

D. Share Performance and Shareholder Structure

2. SODIC Backdrop

A. Company Overview / Track Record

B. Clean and Growing Land Bank

C. A Trusted Brand Name

D. Operational Efficient Model

5. Annex

F. Experienced Management Team

A. Awards

4. Resilient Financial Performance

A. Sales Performance & Unrecognized Revenues

B. Launched Projects’ Profitability

C. Delivery and Execution

D. 9M 2014 Vs. 9M 2013

C. 2014 Update

B. Egypt Macroeconomic & Real Estate Sector Overview

E. Well Rounded Corporate Strategy

Introduction

4

The government has embarked on a number of long awaited schemes that aim to address economic issues including subsidy reform, mortgage market stimulation and the launch of national projects such as the Suez Canal project

Such schemes are expected to have positive implications on macroeconomic indicators in the near future

Improving Macro Economic Indicators

Dispute free and constantly growing land bank with around 3.6mn sqm of raw land in Egypt (Eastown settlement with MoH in 2014)

Attractively located land bank, especially with the recent award of the 301 Feddan plot serving as one of a very few sizeable plots remaining in the New Cairo

Clean and Growing Land Bank

Ability to take a project from concept to delivery by leveraging on in-house capabilities

Successful navigation through different market conditions

Introduction of market tailored projects with new ticket price ranges

Efficient Operational Model

A leading real estate brand associated with the development of top quality projects

Successful launch of 9 projects with a reputation of on-time delivery when compared to other developers Trusted Brand Name

Proven Operational Track Record

Consistent recognition of positive net sales even during periods of economic disruptions

Collection rate of over 95%

A history of cumulative net sales of some EGP 10.4 bn and delivery of some 1,800 units

EGP 4bn of receivables and EGP 5.7bn of unrecognized revenue

Investment Synopsis

An experienced management team that has been able to navigate the company during times of economic disruptions

Management team is governed by international best practice corporate governance given fragmented shareholder base and active BoD

Experienced Management Team

An average GPM of 36% for launched projects

Exceptional performance during 9M14 compared to 9M2013, 316 units delivered during 9M 2014

Continuous ability to raise debt on the back of cash generation ability

Resilient Financial Performance

Encouraging Real Estate Market

Dynamics

A relatively young and growing population supported by an increasing rate of annual marriages coupled with an underserved mortgage market with below average consumer credit

Market characterized by a small number of densely populated cities, with low urbanization and a supply shortage of no less than 200K units per year

Well Rounded Corporate Strategy

EGP 17bn worth of residential units to be introduced over the next six years

Increasing the recurring income portfolio through including additional retail and commercial space as part of the developments

Tapping secondary city markets and possibly the secondary home market

Key Investment Highlights

2014 Update

Achievements and Updates

Eastown settlement, 301 award & new launches on Eastown Residences

2Q14

Eastown settlement with Ministry of Housing for an additional payment of EGP 900 million over 7 years unlocking some EGP 5 billion of residential inventory

Financial cleansing: reversal of non performing land sales & fully impairing Syria’s investment (FY 2013)

Ripplewood acquires 9.4% stake in SODIC (previously owned by EFG Hermes)

Eastown Residences (ETR) Phase V launch worth EGP 246 million selling out

301 Acre award letter received from New Urban Communities Authority

ETR Phase VI launch worth EGP 359 million selling out EGX approves capital increase subject to EGM approval

Strong start to the year’s sales, Solidaire settlement & drawdown on syndicated loan

3 mega villas sold in Allegria worth EGP 52 million; 27

offices sold in The Polygon worth EGP 79 million

Amicable Settlement with Solidere International (SI) unlocking 250,000 sqm of land in the heart of Westown, expected to generate some EGP 1.3 billion of sales

Westown Residences Phase X launch worth EGP 531 million selling out

SODIC West Syndication Drawdown: Tranche A worth EGP 330 million, refinancing 3 existing facilities

1Q14

Shoring up our finances, both debt & equity, ETR Launch fully sold

Signature of EGP 950 million loan with AAIB (301 Acre); EGP 255 million drawdown in less than 2 weeks

EGM approves EGP 1 billion capital increase to existing shareholders

Signature of EGP 300 million loan with CIB (SI Blocks) ETR Phase VI launch worth EGP 353 million selling out

3Q14 Capital increase 99.3% subscribed for, new launches on Westown & Villette (301 plot)

Successful closure of circa EGP 1bn capital increase New launches on Westown Residences Courtyard EGP 250

million Target to launch of first phase of Villete (301 Plot) in

December

4Q14

-

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

8.00

9.00

10.00

11.00

12.00

13.00

14.00

15.00

16.00

17.00

18.00

19.00

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14

Volumes OCDI '000 OCDI EGX 30

SODIC Performance² EGX 30 Performance Avg. Daily Trading Value (EGP mn)

High / Low ²

Exceptional share price performance and fragmented shareholder structure

1 As at 11/11/2014 ² Based on adjusted prices post rights issue

Q1 2014 Q2 2014 Q3 2014

10% 18%

3% 15%

49%

20%

16.4 33.7 37.2

11.0 / 8.87 12.1 / 9.2 17.7 / 11.9

YTD¹ Stock Performance of +79% YTD¹ EGX Performance +39%

Share Performance & Shareholder Structure

SODIC’s Share Performance

Solidere settlement WTR Phase X launch Syndication drawdown

Eastown settlement 301 Acre award letter EGX approves capital increase ETR Phase V/VI launch Ripplewood acquires 9.4%

EGM approves capital increase 301 Acre loan & down payment CIB loan Positive Q2 results ETR Phase VII launch

Shareholder Structure

Share Information

No. of Shares Outstanding 338.9 mn Market Capitalization EGP 5.5 bn Symbol:

EGX: OCDI.CA Reuters: OCDI.CA Bloomberg: OCDA.CA

Index Inclusion: EGX 30 EGX 100 MSCI IMI

Capital increase 99.3% subscribed Westown Courtyard launch

SODIC Backdrop

SODIC is amongst Egypt’s leading real estate companies with a significant presence in high-end and upper-middle primary housing segment in Greater Cairo

Total land bank of 9.78 mn sqm with prime locations in East & West Cairo

Diversified launched project portfolio: 6 residential projects comprising 4,500 units 2 retail projects comprising 43,000 sqm of BUA 1 commercial project comprising 70,000 sqm of BUA

In-House execution capabilities: Design, Construction Management, and Facility Management

Publicly listed since 1996, non-family owned, with a strong corporate governance framework

Market Cap of some EGP 5.5 bn with a diversified shareholder base

Brief Overview

SODIC, Egypt’s trusted developer, emerging stronger post revolution

1 Since Inception, excluding Beverly Hills including commercial and retail ² As of 30th September 2014

Company Overview - Proven Track Record

Key Highlights

Of Contracted Sales 1, over 4,800 units

EGP 11.4 bn, Of unrecognized revenue²

EGP 5.1 bn, Of sellable inventory²

EGP 730 mn, Of receivables backlog²

EGP 4 bn,

Of non launched & raw land bank²

3.6 mn sqm Collection rate for receivables²

Over 96% Delivered units 1

Over 1,800 EGP 17.0 bn Expected Sales from Non Launched and Raw Land Bank

8 8

1 Excluding Syria Land Bank (Fully Impaired) 2 Includes Designopolis, BISC and Infrastructure assets

Launched Projects

63%

Unlaunched Projects

24%

Raw Land Bank 13%

West Cairo

Clean and Growing Land Bank1

Total Land Bank 2.2mn sqm Total Land Bank 7.5mn sqm

Total Land Utilization

9.78 mn sqm

Unlaunched & Raw Land Geographical Distribution

East Cairo

50.08%

West Cairo

49.92%

3.65 mn sqm

2. Non Launched Projects Westown Residential 359k sqm

Westown Retail/Commercial 91k sqm

The Strip (Phase 2) 104k sqm The Polygon 9k sqm Total Non Launched 563k sqm 3. Raw Land Al Yosr 1.26mn sqm Total Raw Land 1.26mn sqm

1. Launched Projects Land Area Allegria 2.4m sqm Forty West 56k sqm Westown Residence 584k sqm The Polygon 44k sqm The Strip 105k sqm Westown Hub 50k sqm CASA 294k sqm Beverly Hills 1.9m sqm Other2 260k sqm Total Launched Projects 5.7mn sqm

1. Launched Projects Land Area Eastown Residential 341k sqm Kattameya Plaza 126k sqm Total Launched Projects 418k sqm 2. Non Launched Projects Eastown Residential 358k sqm Eastown Retail 159k sqm 301 Acre Plot Residential 1.0mn sqm 301 Acre Plot Retail/Comm. 229k sqm Total Non Launched Projects 1.82mn sqm

East Cairo

All of the Company’s Land Bank in Egypt is free of any legal encumbrances

Prime locations, unencumbered & 63% utilized

9 9

Successful project launches and delivery

1 Comprised of 218 units for sale and 32 units for lease 2 Including areas earmarked for retail & commercial

A Trusted Brand Name

Westown Residence (“WTR”)

Location: West Cairo

Launch: December 2011

Land Area: 1mn sqm2

Type of Units: Various Types of Residential Units

Starting Delivery: 2014

Completion Date: 2017

Gross BUA BUA: 646k sqm2

Allegria


Launch: January 2008

Land Area: 2.4mn sqm

Type of Units: Residential Single Family Units



Gross BUA BUA: 566k sqm

Forty West


Launch: Feb. 2009

Land Area: 56k sqm

Type of Units: High-end Apartments




The Polygon


Launch: Dec. 2009

Land Area: 53k sqm

Type of Units: Integrated mixed-use office park




Allegria Forty West

Westown Residences (“WTR”) The Polygon

7 Launched projects within SODIC West

1 2

3 4

Allegria


Launch: March 2010

Land Area: 210k sqm

Type of Units: Retail stretch mall






7 Launched projects within SODIC West

CASA


Launch: July 2011

Land Area: 294k sqm

Type of Units: Only Apartments




Westown Hub


Launch: Oct. 2012

Land Area: 50k sqm

Type of Units: Entertainment retail complex




The Strip CASA

Westown Hub

5 6

7



2 Launched projects within New Cairo, soon to launch on 301 Plot

Kattameya Plaza (“KP”)

Location: East Cairo

Launch: May 2010

Land Area: 126k sqm

Type of Units: Upper Middle Class Apart. Buildings



Gross BUA BUA: 121K sqm

Eastown Residences (“ETR”)


Launch: May 2013

Land Area: 857k sqm

Type of Units: Residential Units




8

301 Acre Plot


Launch: 4Q14

Land Area: 1.2m sqm

Type of Units: Mixed use



Gross BUA BUA: 815k sqm*

Eastown Residences (“ETR”) Kattameya Plaza (“KP”)

301 Acres Plot

9

Ability to take a project from concept to delivery Depth of in-house capabilities including:

- Market research - Product development/ design - Finance - Licensing & permitting - Sales - Procurement & construction management - Delivery & operation

A developer building on the positives and tackling the challenges

Fully Integrated Developer

Strength Description

Proprietary, honed process Efficient management of input from all stakeholders

achieving optimal business cases Emphasizing on coordination between project

development and sales team Efficiencies & capabilities to standardize processes,

evolve & optimize products

Process Driven Development

Successful navigation through different market conditions including:

- Boom (2006-2008) - Global recession (2009) - Revolution year (2011) - Post Revolution, political/economic Unease - Revolution continues (2013) - Stability (post presidential elections - 2014)

Full Cycle Experience

Po

st-r

ev

olu

tio

n s

tra

teg

y s

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t o

f la

un

chin

g m

ark

et-

tail

ore

d p

roje

cts

New market needs Extensive interviews/focus groups with

potential customers Competition research/ sales analysis Review of SODIC’s experience during the

2009 recession

Assessments

4 key elements to target “Upper Middle Income Class” Affordability Functionality Exclusivity Safety

Outcomes

New products with ticket price of EGP 0.8 – 2.8 million Efficient structural design & construction Higher densities Smart design with unique features

Actions

Unparalleled success of WTR I – X and ETR I - VI Some EGP 4.2 billion of sales1 Higher margins Quicker process Market leader

Results

1 Includes all phases in WTR & ETR projects since launch to 30/9/2014, some 2,626 units.

Efficient Operational Model

A raw and unlaunched land bank of 3.6 million sqm1, perfectly positioned for growth

1 Excluding 1.56 million sqm in Syria. 2 Includes EGP 1.1 billion of land payments 3 Subject to change

SODIC Corporate Business Units Strategic Initiatives

Development

Develop functional, affordable, community centric products

Increase densities to improve land utilization

Shift from primarily residential to mixed use developer

Develop world class master plan for the 301 Acre plot

Sales & Marketing

Maintain “Market Leader” positioning

Increase the SODIC Family of Brands

Interaction with development ensuring best product offering

Prepared team for 301 launch ( 4Q 2014)

Spend EGP 1.9 billion in 20142

Deliver 441 units (310 West, 131 East)

Maintain reputation for delivery ahead of schedule

Bolster in house capabilities to reduce construction costs

Preparations for swift execution post 301 plot launch

Execution Finance

Swift drawdown to support timely execution

Improve internal book keeping to eliminate future surprises

Leveraging platform; Bringing to market some EGP 17 billion of new residential inventory

Expected Outcome (3-6 Years)

1

Collect some EGP 4 billion of receivables from existing sales; Maintain collection rate of over 95% 2

Timely execution spending, delivering more than 8,000 residential units 3

Positive free cash flows to equity post 2016 4

Increase recurring income portfolio (retail + commercial), from a current 47k sqm to 192k sqm3 5

Facility Management

Maintain best in class

customer service experience

Enhance value added services

Penetrate secondary homes & secondary city markets 6

Well Rounded Corporate Strategy

Experienced Management Team

SODIC is one of the few companies in Egypt that is not family owned & managed

Management with full economic cycle experience, successfully navigated global recession & revolutions

A development organization capable of monetizing land positions at optimal value

Diverse team assembled since 2006 with untapped capacity

Mr. Ahmed Badrawi

Chief Technical Officer

Eng. Shehab El Orabi

Chief Financial Officer

Mr. Omar El Hamawy

Chief Projects Officer

Mr. Hatem Halwagy

Chief Commercial

Officer

Mr. Ahmed Labib

Chief Projects Development

Officer

Mr. Basil Ramzy

Managing Director (Executive)

Dr. Hani Sarieldin Managing Director

(Executive)

Mr. Ahmed Badrawi

Chairman (Non-Executive)

15

Eng. Safwan Thabet

Mr. Shafik El Baghdady

Dr. Walid Abanumay

Mr. Sabah Barakat

Mr. Omar El Hamawy

Eng. Shehab El Orabi

Mr. Basil Ramzy

Member (Non-Executive)




Member (Executive)

Member (Executive)

Member (Executive)

Executive Management

Board of Directors

Resilient Financial Performance

16

Sales Performance & Unrecognized Revenues1

FY 2014 is expected to be slightly higher than FY 2013

2013

Some EGP 10.4 billion of net sales since 2008 of which 50% yet to be recognized

Annual Net Sales (EGP Million)

17

1 Monthly Sales from January 2008 to Sept 2014. Unrecognized revenues accounting for EGP 5.1 billion as at 30th of September 2014. 2 Actual Contracted Net Sales as at 30th of September 2014.

2008 2009 2010 2011 2012

Regular Operating Environment

Global Financial Recession


Jan 25th Revolution Regular Operating

Environment June 30th

Revolution

2014


Cumulative Net Sales (EGP mn) Net Sales (EGP mn)

2 1,884

849

1,839

6

1,619

2,478

2,019

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Launch of: • WTR phases 7, 8

& 9 • Eastown

Residences “ETR” phases 1 to 4 account to 50% of total sales

Allegria Phase 1&2 launch

Some 650 Allegria units contracted

Launch of: • Allegria phase 3 &

4 • The Polygon • Forty West • The Strip

Cumulative Sales: EGP 2.7 Billion

KP launch achieving EGP 250 million of sales


Launch of: • Small offices in The

Polygon • Westown Residences

“WTR” Phase 1 Turmoil causing EGP

735 million in cancellations


Launch of: • Allegria phase 5 • WTR Phases 2 to

6 WTR achieved

sales of some EGP 1 billion


Launch of: • WTR phases 10 • ETR phases 5-7 • WT Courtyard

Expected to launch EGP 650 million on new 301 project in 4Q14

6,019 6,437 6,720 6,826 8,338 8,855

10,000

Phase I Phase II Phase III Phase IV Phase V Phase VI Phase VII

Project Profitability

Launched Projects’ Profitability GPM of 36% on some EGP 10 billion of unit sales

Pricing Ability

Sellable Inventory Profitability 1 Percentage Sold (Value)

18

1 All figures in EGP unless otherwise stated 2 Unsold Allegria inventory amounts to EGP 188 mln (16 units), displaying an average price per unit of EGP 12 million 3 Includes the investment cost of leasable assets 4 Expected gross profit margin, excluding NPV adjustments

Total Inventory Development Cost3 Sold

Inventory Projects’

GPM 4

Project (EGP millions)

Allegria2

Polygon

Forty West

KP

WTR (I-X)

Total

4,392 2,731 4,202 38%

712 639 539 31%

589 495 394 33%

641 438 624 33%

2,233 1,304 2,220 42%

10,747 34%

Sold Unsold

96% 4%

76%

67% 33%

99% 1%

93% 7%

24%

ETR (I-VII) 2,179 1,490 2,043 27% 94%

10,023

6%

7,097

Eastown Prices (EGP/sqm)

May ‘13 May ‘13 June ‘13 Sept. ‘13 May ‘14 June ‘14 Launch Date

66% increase

Sept ‘14

97% 3%

Delivery and Execution1

SODIC delivered some 316 units during 9M 2014 across 8 different projects, namely: Allegria, Kattameya Plaza, Forty West, The Polygon, The Strip, Casa ,WT Hub & WT Residences

Project Number of

Units Delivered

Units %

Delivered Investment

Cost2 %

Completion3 Delivery

Start Date Delivery End Date

1 All figures as at 30th of Sept 2014. 2 Investment cost represents the expected construction and land costs. Figures are in EGP millions. 3 Percentage completion represents the actual earned value, calculated on a weighted average basis per project phase. 4 Westown Residences Phase I shows an 96% development completion on a standalone basis. 5 CASA is a jointly owned project (80% Palm Hills subsidiary & 20% SODIC). SODIC owns 63 apartments ⁶Polygon phase I

Over 4,900 units under development (36% delivered) with an investment cost of some EGP 7.4 billion

Delivery Execution

19

Allegria

Kattameya Plaza

Forty West

WT Residences (I-X)

The Polygon

The Strip

WT Hub

Total

1,255 1,094 87% 2010 2,731 95%

474 382 81% 2013 438 99%

133 55 41% 2012 495 96%

1,391 87 6% 2013 1,304 34%4

250 110 44% 2013 639 91%⁶

84 24 29% 2012 241 76%

47 2 4% 2014 66 100%

4,983 1,801 36% From 2010 to 2017 EGP 7,400mn NA

2015

2015

2015

2017

2016

2015

2015

ET Residences (I-VII) 1, 286 - - 2016 1,490 16% 2017

CASA5 63 46 73% 2013 NA 100% 2015

9M 2014 Vs 9M 2013

Building on strengths

Item (in EGP mn unless otherwise stated)

9M 2014

20

9M 2013 Variance

%

Gross Contracted Sales

Net Contracted Sales

Net Contracted Sales From New Launches

Cash Collected

CAPEX

Number of Units Delivered (units)

Value of Units Delivered

Gross Profit

Net Profit

2,156

2,019

2,159

1,965

0%

3%

Number of Units Sold (units) 901 1,099 -18

1,348 1,285 5%

60%

546 628 -13%

316 347 -8%

903 672 34%

309 252 23%

110 80 38%

Debt Raised/Secured 2,150 343 526%

Cash at banks & on hand 1,034 456 127%

1,478 925

Annex

21

Awards

A globally recognised developer

22

EUROMONEY CITYSCAPE

EUROMONEY MINISTRY OF TRADE & INDUSTRY

2013: Allegria - best residential project – Built

2013: The Polygon - best commercial and mixed use project – Future

2014: Best office business developer in Egypt (Polygon)

2011: Best developer overall Egypt 2011: Best mixed use developer Mena 2011: Best residential developer Mena

2010: Enterprise Innovation Award for registering all of its trademarks with the Internal Trade Development Authority, an affiliate of Ministry of Trade and Industry

BUSINESS TODAY EUROMONEY

CNBC PROPERTY AWARDS EUROMONEY

2010: Best developer overall Egypt 2010: Best mixed use developer Mena

2011: Best company by BT100 rank

change at the BT100 Crystal Awards

CNBC Arabian Property 2009: Allegria best architecture

CNBC Property 2008: Allegria best development in Egypt with a 5-star award

CNBC Property 2008: Allegria best golf course development with a 4-star award

2007: Allegria award of merit from the American Society of Landscape Architects (ASLA) for its master plan, developed by world-renowned master planners EDAW

http://www.asla.org/index.aspx

Egypt Macro Economic and Real Estate Sector Overview

23

8.1%

9.8% 10.8%

13.7%

12.0% 12.0%

10.4%

June 10 June 11 June 12 June 13 June 14 June 15 June 16

12% 11%

9%

7%

10% 10%

8%


24

The government has

embarked on a

number of schemes

that aim to address

economic issues

These initiatives are

expected to have

positive effects on

macro economic

indicators

Recent Government Initiatives

Subsidy Reforms

In July 2014, the Egyptian government kicked off a much-awaited fiscal consolidation, aiming to bring the fiscal deficit towards a sustainable path and revive economic growth. The approved measures constitute:

Rationing wide-range of fuel products Re-pricing of electricity and outlining a five-year plan for phasing out fuel subsidies Increasing sales taxes on tobacco and alcohol

1

Item Annual Saving

(EGP Bn)

Diesel 16.8

Gasoline 8.9

Fuel Oil 4.0

Natural Gas 3.7

Electricity 8.5

Cigarettes & Alcohol

4.5

Total 46.4

% of GDP 2.0%

Mortgage Finance 2

The government is stimulating private and household credit through the launch of an EGP 10bn programme by CBE to promote mortgage finance

The programme would lend banks funds at preferential rates for maturities of more than 10 years that would be utilized in the financing mortgage for low and middle income families

Suez Canal & New Road Network

The government recently announced to build a new Suez Canal alongside the existing 145-year-old historic waterway with an estimated cost of USD 8.2 bn (including building underground tunnels) to be completed in five years. The new canal is set to boost annual revenues to USD13.5 bn by 2023 from USD5.2 bn in FY12/13

3,600 KM of new roads to be constructed at a cost of EGP 36 billion

Macroeconomic Indicators

Real GDP Growth2 5.2%

1.8% 2.2% 2.1% 2.3%

3.3%

4.5%


Budget Deficit (%GDP)3

Inflation2

1 Source: Bloomberg, Reuters, EFG Hermes Research 2 Source IMF 3 Expected budget deficit is based on press release by the Ministry of Finance

3

Improving Macro Economic Indicators1

Planned government initiatives to address long-standing economic issue

900

270

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14

35 33 30 28 27 27 26 25 24 22 20 18 16 16 15 15 16 16 14 15 15 16 15 15 14 14 13 14 16 15

19 19 19 19 18 17 17 17 17 18 17 17 17 17 17 17

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14

Following the 30th of June

protests and the ouster of

ex president Morsi,

several Macro indicators

showed signs of

improvement with CDS

spread dropping from an

alarming 900 bps and a

drop in 1 year T-bill yield

Macro risk receded with

the support package

promised by Saudi Arabia,

UAE and Kuwait. The aid

received pulled the breaks

on further devaluation of

the EGP and revered the

constant decrease in

Egypt’s foreign reserves

Improving Macroeconomic Indicators1

Egypt’s macroeconomic backdrop

25

Recent Government Initiatives

Egypt Spot & 12 Months Non Deliverable Forward

1 Source: Bloomberg, IMF, CBE 2 Due to the Monetary Police Committee’s decision to raise overnight lending and deposits rate by 100 bps

CDS Spread (basis points)

Post 30th June Protests

Post 25th Jan Revolution Post Presidential Elections

1 Year T-Bill Yield (%) Dollarization (% of Total Deposits)

Due to MPC’s decision to raise lending and deposits

rate by 100 bps

2

23%

19%


Stable FX Reserves (USD Billion)

Country Received Total Pledged

USD 4.0 bn USD 6.9 bn




Incoming International Support Packages

7.1

7.9


Spot Forward

14.9%

12.2%


5.8

7.14

967 1,048

1,466 1,510

2,083 1,788 1,771

1,452

2,814

3,202

1,784

3,106

3,747

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

21%

22%

20%

13%

11%

7%

4%

2%

21%

23%

19%

13%

11%

7%

4%

2%

25% 15% 5% 5% 15% 25%

<10

10-20

20-30

30-40

40-50

50-60

60-70

>70

Female Male

Young population to fuel growth

26

Egypt's large and

growing population is

a key asset compared

to its MENA

counterparts

The country is set to

exhibit a strong

working age

population growth

over the coming period

The growing marriage

rate (standing at 933

thousands marriages

per annum), coupled

with increasing

urbanization levels

have resulted in an

increased demand for

housing units

Recent government

initiatives relating to

mortgage financing

are expected to further

enhance demand

Market Drivers Remain Intact

Population & Growth Vs Arab States

1 Source: CAPMAS, IMF, US Census, Central Banks of respective countries and Industry reports; Data as at 31/12/2013 2 Source: Jones Lang LaSalle, Bloomberg, Company Financial Statements 3 Key developers include SODIC, Palm Hills and Talaat Mostafa

Demographics

Gross Pre Sales for Key Developers3 (EGP mn. FX Rate) Market Characteristics / Trends

87

33 32 28 25

5 4 3 2

2% 1% 1% 2%

3%

5%

3%

2%

6%

-

10

20

30

40

50

60

70

80

90 Population (mn) Growth (%)

World Average: 1.2%

Young population

(around 60% below the age of 30)

Encouraging Real Estate Market Dynamics1

Encouraging Real Estate Market Dynamics2

Market characterized by a small number of densely populated cities, with low urbanization. Cairo is one of the most dense metropolitan areas in the world

Sales are supported by a large population with an increasing number of marriages to spur demand

Strong pent-up demand still not matched by equal supply (housing gap estimated at not less than 200k units annually)

Inefficiencies of public sector players led to emergence of a number of mega private sector developers

Summer 2014 witnessed an increasing demand for secondary homes

Disclaimer

27

This Presentation is intended for information purposes only and does not constitute or form part of an offer for sale or subscription or an invitation or solicitation of an offer to subscribe for or purchase securities of any kind and neither this document nor anything contained herein shall form the basis of any contract or commitment from any party whatsoever. Information, including but not limited to financial information, in this presentation should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities or any other instruments in or, in entities related to, SODIC or any other company. This Presentation contains important and privileged information on SODIC which is solely owned by SODIC and may not be relied on or used by any person whosoever for any purpose, and therefore shall be kept secret and confidential by any receiving party. This document includes forward-looking statements. The words "believe", "anticipate", "expect", "intend", "aim", "plan", "predict", "continue", "assume", "positioned", "may", "will", "should", "shall", "risk" and other similar expressions that are predictions of or indicate future events and future trends identify forward-looking statements. These forward-looking statements include all matters that are not historical facts. In particular, the statements regarding strategy and other future events or prospects are forward-looking statements. Recipients of this document should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are in many cases beyond the control of the Company. By their nature, forward-looking statements & projections involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and the Company's actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this document. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that the Company, or persons acting on its behalf, may issue. Various factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this document including worldwide economic trends, the economic and political climate of Egypt, the Middle East and changes in business strategy and various other factors. All information contained in this presentation, including but not limited to information relating to the Egyptian real estate and financial markets, are compiled from sources known to be reliable and/or publicly available data reasonably assumed to be accurate (the “Source Data”). The Source Data may contain errors and/or inaccuracies; SODIC provides no warranties or guarantees of any kind, expressed or implied, and accepts no responsibility whatsoever, with regard to the accuracy, completeness or correctness of the Source Data used in the Presentation. This disclaimer is to be considered an integral part of the Presentation and SODIC’s liability in respect of this Presentation and is to be governed by Egyptian law under the jurisdiction of Egyptian courts.

Thank You

For SODIC investor relations enquiries contact: Heba Makhlouf [email protected] Tel: +202 3854 0121 SODIC IR website: ir.SODIC.com SODIC corporate website: www.SODIC.com

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