investor presentation march 2018 developing east cairo...

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SINCE1959

DEVELOPING EAST CAIRO

Investor Presentation March 2018

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DISCLAIMER

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, Madinet Nasr for Housing & Development (“MNHD”) or any other company. This

Presentation contains important and privileged information on MNHD which is solely owned by MNHD 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 may contain forward-looking statements which, by their nature, involve a number of risks, uncertainties and assumptions that could cause actual results or

events to differ materially from those expressed or implied by these statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial

effects of the plans and events described within this document. In particular, actual results may be adversely affected by future developments affecting inflation, interest

rates, taxation, social instability or other economic, political or diplomatic or other matters. Forward-looking statements contained in this document that reference past

trends or activities should not be taken as a representation that such trends or activities will continue.

All information contained in this presentation, are compiled from sources known to be reliable and/or publicly available data reasonably assumed to be accurate (the “Data”).

The Data may contain errors and/or inaccuracies; MNHD 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 Data used in the Presentation.

This disclaimer is to be considered an integral part of the Presentation and MNHD’s liability in respect of this Presentation and is to be governed by Egyptian law under the

jurisdiction of Egyptian courts.

IR CONTACTSalah KatamishInvestor Relations DirectorEmail: [email protected] #: +2 (02) 2400 6207

Madinet Nasr for Housing & Development4 Youssif Abbas Street, District 2Nasr City, Cairo, Egyptwww.mnhd.com

I. MNHD Overview

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MNHD | COMPANY OVERVIEW

19.9%

7.5%

15.2%

3.7%3.5%3.2%1.7%

45.3%

BIG Investment Group (BPE Managed Vehicle)B Investments (BPE Managed Vehicle)Holding Company for Construction and DevelopmentNational Investment BankOlayan Saudi Investment CompanyBanque MisrSchroder InternationalFree Float

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, BPE Partners’ managed vehicles acquired a 31.2% stake in MNHD (the single largest shareholder collectively) – currently 27.4%

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 sqm mixed use development in East Cairo (in front of Cairo Airport)Sarai- 5.5mn sqm mixed use development in East Cairo (strategically located next to

the new administrative capital)

MNHD IS CURRENTLY POSITIONED AS ONE OF EGYPT’S LEADING REAL ESTATE DEVELOPERS

SHAREHOLDING STRUCTURE

KEY STATISTICS

CONTRACTED SALES (FY 2018) EGP 5.5BN

LAND BANK (sqm) 9MN (C. 7MN UNDEVELOPED)

LAND BANK LIABILITIES MINIMAL

NET PROFIT MARGIN (2018) 44.9%

MARKET CAP (21-FEB-2018) EGP 9.1BN

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MNHD | TIMELINE

MNHD’S MANAGEMENT LED TURNAROUND PIVOTED THE COMPANY FROM A PURE LANDOWNER TO ONE OF THE LEADING REAL ESTATE DEVELOPERS IN EGYPT

2006/2007 2009 2012 2013 2015 2016 2017

BoD reshuffled and control assumed

New CEO appointed, stronger team brought in (multinational background)

Outstanding Taj City land disputes resolved

Changed the business model to include off plan sales

Launched Tag Sultan in 2012; a 1,700-unit project in Taj City where sales exceeded EGP 2.3 bn

Sarai master plan developed by renowned British master planners and approved via a Ministerial decree

Signed a co-development agreement with PHD to develop

433,000 sqm in Sarai

MNHD was positioned as a top tier real estate developer

Another wave of corporate restructuring that brought in new talent in key positions

Launched Sarai Reached EGP 5bn in

Contracted Sales Approved the new and

improved master plan for Taj City

Resolved Disputes on 9mn sqm of land

Changed management and developed master p lan for land bank

Launched and sold mega projects (aborted raw land sa les model )

Expanded posi t ioning to upper middle income market

1.8

9.1

21-Feb-20192006

c. 5x Growth

205

2,782

20182006

c. 14x Growth

Revenue

(EGP mn)

Market Cap

(EGP mn)

MNHD MANAGED TO ACHIEVE A 5X GROWTH IN MARKET CAP AND 14X GROWTH IN REVENUES

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Pre-Sales(EGP mn)

Net Revenues (EGP mn)

EBITDA (EGP mn)Margin (%)

1,039 823

3,4255,163 5,495

20172014 2015 2016 2018

744 771

2,0142,428 2,783

201720162014 2015 2018

295 307

1,154 1,2771,559

20172014 2015 2016 2018

203 262

767932 1,085

20162014 20182015 2017

0.21 0.27

0.77 0.84 0.82

2014 2015 2016 2017 2018

C A G R : 5 2 % C A G R : 3 9 % C A G R : 5 2 %

Net Income (EGP mn)Margin (%)

EPS (EGP)

C A G R : 6 6 %

40% 40%

57%52%

27% 34%38% 38%

C A G R : 4 0 %

Net Revenues grew by 15% Y-o-Y, reaching c. EGP 2.8bn compared to EGP 2.4bn in 2017. The increase was attributed to the company delivering a record number of units, reaching 788 units during 2018 and implying a Y-o-Y increase of 46% as well as a 6% increase in the company’s contracted sales

Net Income increased by 16% to reach c. EGP 1.1bn compared to EGP 932mn during 2017. The slight increase in EBITDA & Net Income margin is mainly on the back of land sales, which have significantly higher margins

MNHD | CONSOLIDATED FINANCIAL HIGHLIGHTS

39%

56%

883

381

2,945

752

551

Launched & Sold Launched & UnsoldUnlaunched Residential Unlaunched CommercialCapital Gardens

3,555 5,623

Taj City Sarai

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MNHD | LAND BANK

MNHD HAS A STRATEGICALLY LOCATED LAND BANK WITH THE MAJORITY OF IT STILL UNLAUNCHED

GROSS LAND AREA (K SQM)

811

423

1,621

700

1,694

804

4,566

1,452

Launched & Sold

Launched & Unsold

Unlaunched Residential

Unlaunched Commecrial

TAJ CITY (K SQM)

SARAI (K SQM)

COMBINED PROJECTS (K SQM)

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MNHD | A FULL FLEDGED COMMUNITY DEVELOPER

MNHD HAS TRANSFORMED FROM A RAW LAND OWNER INTO A FULL FLEDGED COMMUNITY DEVELOPER- LAUNCHING MULTIPLE MIXED USE PROJECTS

OPEN AIR MALL

AUTO MALL

SCHOOL

SPORTS CLUB

BUSINESS PARK BUSINESS PARK

UNIVERSITY

MEGA MALL

HOSPITAL MEDICAL CITY

RESIDENTIALRESIDENTIAL

HOTELS

HOTELS

LAGOON AND WATER FEATURES

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MNHD | STOCK PERFORMANCE

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.00

13.00

Jan-02-2017 Apr-02-2017 Jul-02-2017 Oct-02-2017 Jan-02-2018 Apr-02-2018 Jul-02-2018 Oct-02-2018 Jan-02-2019

Outstanding Shares 1,200,000,000

Price (21-Feb-19) 7.59

Market Cap (31-Dec-18) 9.1bn

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

II. Cobalt Business District

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CBD | OVERVIEW

MNHD IS ABOUT TO LAUNCH THE FIRST PHASE OF COBALT BUSINESS DISTRICT, ITS FIRST COMMERCIAL DEVELOPMENT IN TAJ CITY

Cobalt Business District (CBD) is the first phase of a business hub that MNHD is developing

The business district is comprised of 13 buildings, built on 77,000 sqm of gross land area

The buildings will have a height of G+4 floorsThe project will have a Built Up Area (BUA) of 118,000 sqm

including 28,000 sqm of retail spaceAverage price/sqm will be approx. EGP 55,000Offering payment terms of up to 5 years

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CBD | MASTER PLAN

III. Developments

14

9mn sqm of Strategically Located Land Bank

DEVELOPMENTS | LAND BANK

New Administrative

Capital

5th Settlement Taj City SARAI

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DEVELOPMENTS | TAJ CITY OVERVIEW

3.5 MILLION SQM OF PRIME LAND BANK INSIDE CAIRO

GLA: 3.5 million

BUA: 2.9 million

MASTER PLAN SPECIFICATIONS

PROJECT SEGMENTATION One of the largest land plots inside Cairo across from Cairo International Airport Up to 40% foot print Master plan approved in January 2018 with almost 1:1 FAR. Launched first project, Tag Sultan, in October 2012 (sold out and delivered) Launched phase two of Taj City (T ZONE) in 4Q2015 (phase 1 sold in 4Q2015, phase 2 launched

in May 2016) Launched several other developments in Taj City that was currently being sold Infrastructure for Taj City is in final stages

80%

20%

Residential Commercial

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DEVELOPMENTS | TAJ CITY LAUNCHED PROJECTS

MNHD IS CURRENTLY POSITIONED TO CAPITALIZE ON ITS VAST UNLAUNCHED LAND BANK; HAVING SOLD A MAJORITY OF ITS LAUNCHED PROJECTS

Total BUA (SQM)

Date of Launch

Total # of Units

% Sold

Avg. EGP/SQM

Value of Inventory

304,175

2012

1,764

100%

7,295

EGP 2.4bn

275,920

2015

1,521

90%

18,602

EGP 5.2bn

218,265

2018

1,743

57%

19,452

EGP 4.3bn

Zone T

588,100

-

-

-

50,000

EGP 51bn

Unlaunched Commercial

1,512,735

-

10,356¹

-

19,254²

EGP 54bn


¹ Assuming an average unit size of 150sqm² Weighted Average of BUA sold in 2018

Total

2,898,275

+

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DEVELOPMENTS | TAG SULTAN

LAUNCHED IN 2012

1,389 UNITS DELIVERED OUT OF 1,739 UNITS SOLD

304K SQM OF BUA

AREA RANGE 90-405 SQM PER UNIT

AVG. EGP/SQM 7,259 FOR APARTMENTS & 10,000 VILLAS

TOTAL SALES OF EGP 2.4BN (SOLD OUT AND DELIVERED)

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DEVELOPMENTS | ZONE T

Zone T

LAUNCHED IN 2015

1,521 UNITS

276K SQM OF BUA

TOTAL SALES OF EGP 4.7BN (19% OF TOTAL INVENTORY)


AVG. EGP/SQM 18,602

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DEVELOPMENTS | SHALYA

LAUNCHED IN 2017

915 UNITS

150K SQM OF BUA


AVG. EGP/SQM 18,302


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DEVELOPMENTS | LAKE PARK STUDIOS

LAUNCHED IN 2018

828 UNITS

67K SQM OF BUA



AVG. EGP/SQM 19,158

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DEVELOPMENTS | SARAI

5.5 MILLION SQM IN CLOSE PROXIMITY TO THE NEW ADMINISTRATIVE CAPITAL

GLA: 5.5 million

BUA: 5.3 million

MASTER PLAN SPECIFICATIONS

PROJECT SEGMENTATION 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 sqm for 36% of

revenues. MNHD launched S1 in November 2016 with phase 1 selling out in 24hours (EGP 1.0bn) MNHD launched S2 in February 2017 with phase 2 selling out within 1 week (EGP 1.7bn)

77%

13%

10%

Residential Commercial Capital Gardens

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DEVELOPMENTS | SARAI

MNHD IS CURRENTLY POSITIONED TO CAPITALIZE ON ITS VAST UNLAUNCHED LAND BANK; HAVING SOLD A MAJORITY OF ITS LAUNCHED PROJECTS

Total BUA (SQM)

Date of Launch

Total # of Units

% Sold

Avg. EGP/SQM

Value of Inventory

478,842

2017

2,536

71%From Launched

12,926

EGP 7.0bn

+S2

226,347

2016

1,229

69%

10,070

EGP 3.6bn

3,061,904

-

20,347¹

-

14,430

EGP 163.4bn


20,747

2018

80

55%From Launched

30,728

EGP 0.6bn

1,028,700

-

-

-

30,000

EGP 68bn

Unlaunched Commercial

¹ Assuming an average unit size of 150sqm

484,100

2016

-

-

-

-

Total

5,361,165

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DEVELOPMENTS | TAVAL - S1

LAUNCHED IN 2016

1,229 UNITS

226K SQM OF BUA



AVG. EGP/SQM 10,070

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DEVELOPMENTS | S2

S2LAUNCHED IN 2017

C. 4,000 UNITS

614K SQM OF BUA



AVG. EGP/SQM 12,926

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DEVELOPMENTS | CROONS CONDOS – S2

LAUNCHED IN 2018

344 UNITS

33K SQM OF BUA

TOTAL SALES OF EGP 238MN (49% OF TOTAL INVENTORY)


AVG. EGP/SQM 14,672

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DEVELOPMENTS | CAVANA LAKES – S3

LAUNCHED IN 2018

265 UNITS

78K SQM OF BUA

TOTAL SALES OF EGP 430MN (17% OF TOTAL INVENTORY)


AVG. EGP/SQM 30,728

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DEVELOPMENTS | SARAI S-VILLA

MNHD INTRODUCED THE S-VILLA IN SARAI; A NEW INNOVATIVE PRODUCT THAT OFFERS ITS CLIENTS THE LUXURY OF A VILLA AT THE PRICE OF A TOWNHOUSE

The S-Villa is a new product offered to clients in Sarai The S-Villa is engineered to host 2 villas on one plot of land, aligning luxury with

affordability Each villa has its own garden and view and the top villa also has a penthouse The S-Villa gives clients the convenience and privacy of owning a villa but at the

price of a town house

IV. Tag Sultan Case Study

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TAG SULTAN CASE STUDY | USE OF PROCEEDS

Tag Sultan is MNHD’s first completed project as a full fledged real estate developer

MNHD sold 1,739 units and delivered 1,389 units successfully and on time The project spans across an area of 300k sqm of BUA The project generated revenues of EGP 2.3bn Starting selling price was EGP 4.5k/sqm given it was MNHD’s first residential

development

USE OF PROCEEDS

Tag Sultan – Performa Financials

Revenues 2,361,502,310

Net Income Before Tax 663,872.486

Account

Tag Sultan Net Profit 664

CIB Loan Balance 203

Total 867

Cash Balance 30

PDC 450

Taxes 150

Profit Share 60

Protocol Payment 90

External Infrastructure 66

2017 Cash Dividends 21

Total 867

EGP mn Tag Sultan has generated EGP 867mn in proceeds MNHD used proceeds from Tag Sultan to raise the value of the land for future

developments by starting infrastructure work and finalizing the new and improved maser plan (protocol payment)

MNHD was also able for the first time in 10 years to pay a cash dividend

V. Financials

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FINANCIALS | CONSOLIDATED INCOME STATEMENT

EGP 000’ 2013 2014 2015 2016 2017 2018

Net Revenues 718,540 743,850 771,466 2,014,425 2,428,257 2,782,728

Growth 45% 4% 4% 161% 21% 15%

COGS (391,316) (355,242) (365,416) (658,584) (840,476) (992,283)

Gross Profit 327,224 388,608 406,050 1,355,841 1,587,781 1,790,445

Gross Profit Margin 46% 52% 53% 67% 65% 68%

Selling and Marketing Expenses (37,275) (34,822) (47,158) (133,937) (252,667) (204,421)

General and Administrative Expenses (45,554) (55,815) (60,699) (68,133) (98,355) (97,108)

Depreciation (3,656) (3,897) (4,482) (2,762) (3,795) (10,195)

BOD Expenses (4,280) (4,829) (8,731) (5,197) (10,212) (8,584)

Provisions (4,827) 1,057 13,446 (117,423) (31,321) (32,729)

Operating Profits 231,632 290,302 298,426 1,028,389 1,191,431 1,437,408

Finance Costs (7,177) (9,050) (10,319) (11,076) (28,372) (112,879)

Capital Gain - - 2 175 - -

Investment Income (Loss) - 7,317 17,118 12,651 846 528

Other Costs (6,030) (5,440) (4,645) (29,265) (38,669) (16,628)

Interest Income 8,976 13,581 11,378 7,799 31,254 45,428

Other Income 19,719 4,011 17,285 23,010 46,226 74,405

Net Profit Before Tax 247,120 300,721 329,245 1,031,683 1,202,716 1,428,262

Income Tax (60,019) (88,066) (68,980) (264,668) (272,442) (314,055)

Deferred Tax (220) 511 (1,571) 1,887 2,778 (3,831)

Net Profit After Tax 186,881 213,166 258,694 768,902 933,052 1,110,376

Minority Interest (10,904) (10,409) (5,988) (2,325) (1,432) (25,785)

Net Profit After Minority 175,977 202,757 252,706 766,577 931,620 1,084,591

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FINANCIALS | CONSOLIDATED BALANCE SHEET

EGP 000’ 2013 2014 2015 2016 2017 2018

Cash 122,250 212,283 104,444 152,563 268,983 485,592

Investments and Marketable Securities 83,699 100,536 243,725 264,451 217,872 445,395

Inventory 427,063 553,330 839,926 1,073,748 1,412,190 1,588,525

Receivables 942,454 910,689 1,201,343 1,576,872 2,296,377 3,014,500

Letter of Guarantee Coverage 12,927 14,905 9,962 10,865 10,330 10,291

Debtors and other Debit Balances 31,994 138,808 248,693 283,645 400,299 500,344

Total Current Assets 1,620,387 1,930,551 2,648,093 3,362,144 4,606,051 6,044,647

Work in Progress 16,384 17,224 18,255 15,746 12,927 18,122

Long-Term Receivables and Debit Balances 1,738 920,431 2,972,920 5,144,995 6,149,282

Deferred Tax 8,354 8,866 7,295 9,182 11,960 8,129

Total Long-term Investments 15,287 15,286 12,157 14,871 15,722 18,365

Net Fixed Assets 29,790 31,446 45,741 49,716 54,661 54,445

Total Long-Term Assets 71,553 72,822 1,003,879 3,062,435 5,240,265 6,248,343

Total Assets 1,691,940 2,003,373 3,651,972 6,424,579 9,846,316 12,292,990

Banks - Credit Facilities & Short Debt 6,472 22,636 35,533 44,593 187,680 177,963

Current Portion of Long Term Loans 4,239 4,258 4,278 4,298 177,893 137,768

Provision for Claims 67,165 60,999 46,741 131,893 128,641 124,043

Completion Liabilities 50,024 83,973 132,011 169,429 170,827 116,553

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 12,196

Creditors & Other Credit Balances 381,915 371,798 1,455,542 87,177 79,188 39,067

Tax Authority - - 74,133 278,113 296,710 320,079

Liabilities For Project Maintenance - - 47,422 111,407 192,402 319,155

ST Notes Payable 33,164 84,885 88,752 55,502 150,411 110,376

Accounts Payable 110,176 145,365 311,616 339,151 447,911 493,390

Total Current Liabilities 1,012,518 1,144,741 2,550,413 1,530,219 2,065,436 1,850,590

Long Term Notes Payable 26,235 - - 2,942,735 5,119,127 6,734,179

Long Term Debt 16,460 37,269 68,969 259,283 207,153 238,780

Long Term Liabilities 42,695 37,269 68,969 3,202,018 5,326,280 6,972,959

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 1,084,592

Retained earnings 211,728 288,747 377,463 344,351 332,036 918,234

Minority Interest 56,627 65,186 68,301 69,672 70,527 96,136

Shareholders' Equity 636,730 821,363 1,032,588 1,692,340 2,454,598 3,469,441

Total Liabilities and Equity 1,691,943 2,003,373 3,651,970 6,424,577 9,846,314 12,292,990

investor presentation march 2018 developing east cairo...

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