Investor Presentation Depa United Group FY 2010 Confidential Dubai UAE Dubai, UAE
DISCLAIMER This material contains certain statements that are “forward-looking” including management’s expectations and analysis These statements are based on management s expectations and analysis. These statements are based on management’s current expectations and are naturally subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein and readers and listeners are cautioned not to place undue reliance on any forward-looking comments. Depa Ltd undertakes no obligation to reliance on any forward looking comments. Depa Ltd undertakes no obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. 1
2 Claims and Provisions CONTENTS 2010 Overview Financials Appendix Appendix Backlog Outlook
2010 SUMMARY Revenues and net profits shrink after four years of compounded annual growth of over 63% AED Million Revenue Revenues � 2010 was the Company’s ‘recession year’, with revenues declining 32.5% over 2009 2,689 +76% 1 972 1,972 after a Compounded Annual Growth Rate (CAGR) of 76% for four years. 1,814 1,420 1,048 � 61% of 2010 revenues were generated in UAE compared to 66% for year 2009. 284 FY05 FY06 FY07 FY08 FY09 FY10 FY05 FY06 FY07 FY08 FY09 FY10 Net Profit Net Profit � 2010 net profits were significantly impacted by the Burj Khalifa claim and goodwill � 2010 +63% +63% t fit i ifi tl i t d b th B j Kh lif l i d d ill 312 195 impairments, with a total net loss of AED 198 million. 234 93 41 � First loss recorded in Company’s history, following a four-year growth run resulting in a 63% Compounded Annual Growth Rate (CAGR) since 2005. p ( ) (198) (198) FY05 FY06 FY07 FY08 FY09 FY10 Cash from Operations p Cash Generation Cash Generation 174 174 100 � Cash flow from operations was AED 174 million, illustrating 74% growth over 2009, 47 displaying strong operational fundamentals for the company. � Positive net cash position of AED 119 million. (43) FY 08 FY 09 FY 10 FY 07 3
2010 SUMMARY Quality and diversity of backlog a key strength and focus Year End Backlog AED Million Backlog 2,700 2,180 2,100 � The Company’s backlog value remains strong at AED 2.2billion (vs. AED 2.1billion FY09). 1,619 � Only 30% of the backlog is constituted of UAE projects. � Management has focused efforts on the quality of the backlog, and reducing client and FY 07 FY 08 FY 09 FY 10 country related risks country related risks. New Markets � Entered Malaysian market with the refurbishment of the Grand Hyatt. � Signed The Novotel Platinum hotel project in Thailand. � Signed two projects in Syria, beginning with the Yasmin Rotana. � Signed the JW Marriott hotel in Azerbaijan. Completed Projects � Al Meydan Hotel � Qatar Robotic Surgery Centre � Pullman Hotel � Ferrari World � The Staybridge Suites � Royal Mirage III � Arcapita Bahrain � Centro Hotel - Barsha � Dubai Metro – Redline � Dubai Metro Redline � Grand Millennium 4
5 Claims and Provisions CONTENTS 2010 Overview Financials Appendix Appendix Backlog Outlook
CLAIMS, IMPAIRMENTS AND PROVISIONS Strong operational performance prior to provisions, impairments on goodwill and claims H1 2010 FY 2010 AED million Net Profit Net Profit Before Before Provisions Provisions Provisions Provisions Provisions Burj Khalifa (23.9) Claim (70.0) 99.0 106.0 (186.0) Impairments Impairments (41.0) Net Profit Net Profit (103.7) (103.7) (186.0) (199.0) Burj Khalifa Claim 6
7 Claims and Provisions CONTENTS 2010 Overview Financials Appendix Appendix Backlog Outlook
BACKLOG – KEY PROJECT LIST Backlog diversification has increased, with Malaysia and Azerbaijan being added to operations � All projects are in the advanced stage of construction . � Depa continues to have healthy contracted backlog which stood at AED 2.18 billion. � Backlog consists of 253 projects where we are � B kl i t f 253 j t h already working on site and does not include projects where we have yet to begin interior works. � No client or project accounts for more than 10% of N li t j t t f th 10% f backlog as an annual expectation of backlog completion. � Key projects represent 79% of our backlog value and are worth AED 1.7 billion. � The remaining 21% of backlog consists of 212 g g projects with an average value of AED 2.15 million per project. 8
BACKLOG – GEOGRAPHICAL DISTRIBUTION Increased international backlog exposure and reduced regional exposure Estimated Backlog <AED 100 M AED 100 - 150 M Bahrain Qatar >AED 150 M DDS: Thailand Malaysia Parker: China Korea Zurich London Miami Singapore EUROPE & AFRICA GCC & LEVANT ASIA Intercontinental Mazagan Villas Twin Tower Hotel, Conrad Hotel IPC Headquarters Grand Hyatt Reflection at Ritz Carlton On-going / Hotel, Angola Doha Malaysia Keppel Bay Building Singapore Dubai Morocco Recent Oxcis Topaz Project .Doha City Rotana Hamad medical JW Marriott D’ Leedon Height The Novotel Projects London Zone 3 & 8 Centre “Gardinia” Corporation Absheron Baku Singapore Platinum, Thailand � � � � � � � � � � Mövenpick (3 new hotels in pipeline) Mövenpick (3 new hotels in pipeline) Mövenpick S. Mövenpick S Saadiyat Island Development Saadiyat Island Development Intercon – 22 Intercon 22 El Ad Group El Ad Group – South Beach Hotel South Beach Hotel � in Egypt Arabia – 4 new Abu Dhabi Airport Extentsion new hotels Singapore (2010) Potential � � � Mövenpick , Tripoli, Libya hotels Marriott plans 17 new properties planned Accor Group – 8 new hotels in Pipeline � � � � InterContinental - Resort which Hilton – 13 new Taj Exotica & Resort – Dubai Carlson Hotel– Thailand � � includes Holiday Inn Tripoli (2011) hotels in S. Dubai World Central Airport 50 hotels in Intercon, Crowne Plaza & Holiday Inn Arabia pipeline – 9 hotels in Vietnam Various news releases 9
BACKLOG – GEOGRAPHICAL DIVERSIFICATION Significant reduction in UAE and GCC exposure over the last five years BACKLOG BY GEOGRAPHY 0.2% 1.7% Europe Europe 5.0% 5 0% 6.3% 6 3% 11.8% 13.8% 4.8% 18.1% 1.0% Asia 3.4% 9.7% 3.3% 23.1% 36.0% n) 6.4% 6 4% g (AED billion Africa 13.1% 17.0% 10.6% GCC Ex ‐ UAE 11.0% ue of Backlog UAE Ex ‐ Dubai 22.3% 83.6% 18.0% 60.6% Dubai 53 2% 53.2% Valu 15.0% Year-end 33.0% Backlog 15.0% 2006 2007 2008 2009 2010 � Efforts to diversity are successful, illustrated by UAE representing only 30% of backlog. Efforts to diversity are successful, illustrated by UAE representing only 30% of backlog. � Asian backlog representation grows significantly through Design Studio acquisition. 10
BACKLOG – GEOGRAPHICAL DIVERSIFICATION International (non-GCC) portion of backlog at 52% BACKLOG BY GEOGRAPHY FY 2009 FY 2010 Europe Europe Asia 5% 6% 5% Dubai 15% Dubai 33% UAE Ex- Asia Africa Dubai 36% 23% 15% GCC Ex- UAE Ex-Dubai UAE Africa 18% 22% 11% GCC Ex-UAE 11% % 11
BACKLOG – SECTOR DIVERSIFICATION Hospitality remains a key market sector, with residential increasing due to Design Studio BACKLOG BY SECTOR FY 2009 FY 2010 Shops, Malls Theming Others Shops, Malls 3% 3% 1% Yachts and Offices 4% 3% Infrastructure Yachts Others 8% 8% 11% Theming 6% Shops, Malls and Offices Residential Hospitality 18% 2% Infrastructure Infrastructure Hospitality Hospitality 57% 57% 16% 63% R Residential id ti l 2% 12
13 Claims and Provisions CONTENTS 2010 Overview Financials Appendix Appendix Backlog Outlook
FINANCIAL OVERVIEW Receivables aging illustrates largest portion of receivables age under 120 days Ratio Analysis AED Million Actual Actual Actual 2008 2009 2010 Quick Ratio Current Ratio Debt to Equity Ratio 2006 0.39 2006 1.2 2006 Revenue 1,972 2,689 1,814 0.37 2007 0.36 2007 1.1 2007 0.55 2008 2008 2008 Revenue Growth 36.4% (32.5)% 0.85 1.9 0.22 2009 0.68 2009 1.8 2009 0.11 2010 0.76 2010 1.7 2010 0.19 Contract Profit 389 430 114 Contract Profit Margin Contract Profit Margin 19 7% 19.7% 16 0% 16.0% 6 3% 6.3% Receivables Aging G&A (Including General Provision of AED 189 151 209 30m) 350 300 G&A Margin 9.6% 5.6% 11.5% llions) 250 200 200 P Provision for Doubtful Debts i i f D b f l D b 3 3 41 41 70 0 AED (mi 150 100 % of Turnover 0.01% 1.5% 3.9% 50 Amortization of Intangibles & Goodwill 8 32 67 0 Impairment Loss Days 1 - 120 121 - 180 181 - 365 365+ % of Turnover % of Turnover 0.4% 0 4% 1.2% 1 2% 3 7% 3.7% Days Receivable and Payable Profit from Associates 17 23 55 234 Income Tax / Deffered Tax write down 7 (16) 49 181 171 159 159 Net Profit before MI Net Profit before MI 225 225 284 284 (206) (206) 101 Net Profit Margin (Before MI) 11.4% 10.6% (11.3)% 91 81 79 54 61 56 55 51 38 51 Net Profit (After MI) 195 234 (198) 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 N t P Net Profit Growth (After MI) fit G th (Aft MI) 20 0% 20.0% (184 7)% (184.7)% AR Days - including unbilled revenues AR Days - excluding unbilled revenues Net Profit Margin (After MI) 9.9% 8.7% (10.9)% AP Days Unaudited financials 14
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