IR Presentation Adgar Investments & Development LTD August 2019
2 Forward - Looking Information ▪ The information included in this presentation is information based on information included in the Company ’ s periodic report as of June 30, 2019 and December 31, 2018 and as published through the distribution site of the Israel Securities Authority (MAGNA) as well as on prior presentations and immediate reports published by the Company and cannot replace study of the Company reports stated above. In addition, the presentation includes data and information presented in a manner and/or edited and/or segmentation that differ from those presented in the Company's reports and in the Company's past reports, or such that can be calculated from the data included in the Company ’ s reports. ▪ The report does not constitute an offer to purchase Company securities or an invitation to receive such offers and was intended solely to provide information to investors and the information does not constitute the basis for making an investment decision, a recommendation or an opinion, nor does it provide a substitute for reasoned deliberation by a potential investor. The Company is not responsible for the completeness and/or precision of the information, and shall bear no responsibility for any damages and/or losses that may be caused as a result of use of the information. ▪ This presentation features forecast information ("forward-looking information"), as defined in the Securities Law, 5728-1968. Such information includes, among other things, forecasts, goals, assessments and estimates made by the Company referring to future events or matters, the realization of which is not certain and is not under the Company's control and which are known to the Company as of the publication of this presentation. By its nature, forward-looking information is subject to the risk of it not being realized and such information is uncertain. ▪ Realization of the forward-looking information shall be influenced by risk factors that characterize the Company's activity as well as developments in the economic environment in which the Company is active and in outside elements that may influence the Company ’ s activity. ▪ Therefore, readers of this presentation are hereby warned that the Company's actual results and achievements in the future may be differ materially from those presented in the forward-looking information presented in this presentation. ▪ Furthermore, forward-looking forecasts and estimates are based on data and knowledge in the Company ’ s possession upon publication of this presentation and the Company do not undertake to make any update or change in any such forecast and/or estimate so that they reflect events or circumstances applying after the presentation publication date. ▪ It is clarified that the Company do not undertake to update the information included in the presentation.
Group Structure Summary 3 Adgar Investments & Development LTD Adgar Adgar I&D Canada Belgium Inc N.V Adgar I&D 80.1% Poland N.V (19.9% Migdal) Canada Belgium Poland Unless stated otherwise, ownership interest is 100% Adgar partnerships are 100% owned and have a 50% interest in most properties with local partners.
Adgar Investments & Development LTD 4 Rating Diversified Geographically Real Estate V alue – 4B 38 properties Bond rating – Real Estate Portfolio Value of 368 thousand m 2 of leasable space A3 approximately 4.1 Billion NIS Located in major City Centers – Toronto, Tel Aviv, Warsaw, Antwerp Occupancy Variety of workspace solutions Dividend policy for 2018-19 Occupancy (marketing) rate of Dividend distribution of at least 50% Brain 90% as at June 30, 2019 of the annual shareholders FFO Brain Embassy Embassy 1-15 Financial Flexibility 15 -50 Employees Employees The property Adgar 360 (A+B) worth approx. 800 million NIS is Classic Lease without debt. 50+ Employees (The property is pledged against an unused 350 million NIS credit line)
Real Estate Assets as at 30.6.201 9 5 2 Belgium Canada Israel Poland Total Number of Properties Number of Properties Number of Properties Number of Properties Number of Properties 6 23 6 38 3 Leasable area thousand m ² Leasable area thousand m ² Leasable area thousand m ² Leasable area thousand m ² Leasable area thousand m ² 83 149 109 27 368 Occupancy as at 30.6.19 Occupancy as at 30.6.19 Occupancy as at 30.6.19 Occupancy as at 30.6.19 Occupancy as at 30.6.19 91% (94% Marketed) 91% (94% Marketed) 80% (82% Marketed) 87% (90% Marketed) 87% (90% Marketed) assets value Assets value Assets value Assets value Assets value (3) ) 1 ( 1,123M NIS 1,508M NIS 989M NIS 198M NIS 3,818M NIS 1) Not including Investment property under construction – Adgar 360 C. 2) Company ’ s share is 80.1%. 3) Not including Investment property under construction – Property under construction in Poland (Fully owned by the company).
Geographically Diversified & Balanced in Growing Markets 6 ▪ Geographic spread by Company ’ s share in investment property value for 30.6 .1 9 Canada 3 9 % Israel 3 5 % Poland 2 1 % Belgium 5 %
Some of our Tenants 7 Government of Israel Invesco Government of Poland GSK Government of Belgium Softchoice Embassy of Germany, Tel Aviv IBM M. Firon & Co. Advocates CIBC I.D.I Insurance Company LTD. General Motors Direct Finance (Mimun Yashir) Bank Of Montreal
Financial Ratios 8 27.8% Equity to Balance 28% 26.9% 26.8% 26% Ratio (Cash deducted) 24.9% 26.6% 24.3% 25.4% 25.3% 24% 23.4% 23.0% 22% 20% 2015 2016 2017 2018 30.6.19 Equity Ratio (Cash deducted) Equity Ratio (Cash deducted), Migdal loan sorted to Equity 50% 46% Bank debt to pledged 44% 45% assets - LTV 39% 38% 40% 36% 35% 30% 2015 2016 2017 2018 30.6.19 Total financial debt, net. (including bonds) to Investment Property is approx. 67%
Bonds (Million NIS) 9 400 Repayment of 317 300 Bond Principal 232 232 231 231 200 153 86 86 100 - 2020 2021 2022 2023 2024 2025 2026 2027 6.0% 1,600 1,400 Decrease in average Real 5.5% 1,200 Interest Rate for Bonds 5.0% 1,000 4.5% 800 600 4.0% 400 3.5% 200 3.0% 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Outstanding Bonds Real Interest rate
Key Parameters – Reports for 30.6.2019 (million NIS) 10 As at 30.6.19 30.6.18 31.12.18 247 352 323 Cash & Securities Investment Property & Under construction 4,088 3,930 4,061 Total Assets 4,527 4,454 4,570 Current Liabilities 462 468 490 Non - Current Liabilities 2,977 2,938 3,007 Equity 1,088 1,048 1,073 Shareholders Equity 1,054 1,006 1,034 Period 1-6/2019 1-6/2018 1-12/2018 Rent income 123.2 119.8 243.3 NOI 113.5 110.9 224.9 EBITDA 91.6 90.7 183.4 Net profit 68.9 21.6 65.1 Net profit attributed to shareholders 70.8 24.1 71.4 Comprehensive income attributed to shareholders 40.0 29.2 72.7
NOI Growth (Million NIS) 11 261 250 229 225 206 204 200 192 (* 190 186 174 173 (* 173 171 167 146 150 100 Annual rate Annual rate 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 during 2020 according to Q2/19 ** * After selling a stake of 25% of 12 properties in Canada in May 2012 and an additional 25% in January 2014. ** See slide no. 12 See slide no.2 regarding forward-looking information
Annual NOI rate forecast for 2020 (Million NIS – Exchange rates as at 30.6.2019) 12 270 261 258 250 236 229 231 NOI – Million NIS 230 210 190 170 150 Annual Rate according to Q2/19 Including increase from singed Including increase from singed Including expected increase from Including expected increase in contracts for pre-occupied areas contracts for pre-occupied fully leasing Adgar 360 C occupancy rates (1) at Adgar 360 1) Calculated according to a growth in occupancy by 4% in Poland and expected increase in revenues from Brain Embassy. See slide no. 2 regarding forward- looking information.
Shareholders FFO - Quarterly 13 16.4% Yearly 8.3% 22.0 increase from 2018 Yearly 2017 increase from 2017 71.5 19.7 2016 20.0 61.4 18.6 18.2 17.8 17.8 17.3 17.1 18.0 MILLION NIS 16.0 15.1 15.2 14.0 14.0 12.0 10.0 8.0 6.0 Q1.17 Q2.17 Q3.17 Q4.17 Q1.18 Q2.18 Q3.18 Q4.18 Q1.19 Q2.19 FFO
Adjusted FFO Forecast (Million NIS) 14 Forecast 2020 80-85 Forecast 2019 75-80 2018 71.5 2017 61.4 2016 56.7 *) Including occupancy assumptions regarding existing properties & projects in marketing process. Without effects of other possible changes i.e. changes in exchange rates and changes in finance expenses due to change in interest rates. Furthermore, not including FFO from purchasing additional properties (as well as selling properties). See slide no.2 regarding forward-looking information.
Adgar – Accompanying the tenant through every stage 15 Brain Brain Embassy Embassy 1-15 15 -50 Employees Employees Classic Lease 50+ Employees
Brain Embassy awards 16 ❖ 7 th of The 50 Best Co-Working Spots In Europe - Big Seven Travel https://bigseventravel.com/2019/03/europe-coworking/ ❖ Best All Inclusive Office, Leasing Eurobuild Awards, םידבוע+50 ❖ Workplace Arrangement of the Year, Eurobuild Awards, ❖ Office Superstar, CBRE, ❖ International Media Design Award in the Annual Office Space Award category in Shenzhen, China.
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