Investor Presentation Second Quarter 2019 31 st of July 2019 | - PowerPoint PPT Presentation

Investor Presentation – Second Quarter 2019 31 st of July 2019 | Cairo, Egypt

1 Economic Overview

The Group Thrives on Improved Macroeconomic Conditions Inflationary measures where well contained falling within the CBE’s target by the end of the second quarter of 2019 ,despite the supply shock in fruits and vegetables in the beginning of the year. T-bill yields remained relatively un-changed since February after the commencement of the 2019 monetary easing cycle. H1 2019 T-bills Rate Policy Rates & Inflation 19.4% 17.25% 60.0 22.0% Economic 16.25% 16.25% 16.25% 16.25% 16.25% 17.9% 17.5% 17.3% 17.3% 17.2% 50.0 55.3 17.0% 40.0 46.5 14.4% 14.1% 14.2% 13.0% 30.0 12.0% 12.7% 37.0 37.3 37.3 37.0 Fundamentals 20.0 9.4% 9.2% 8.9% 8.6% 7.0% 8.1% 7.8% 10.0 6.4% 0.0 2.0% Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Annual Headline Inflation Monthly Core Inflation Policy Rates Amount Auctioned (EGP bn) Average Yeilds (%) In June 2019 prices of fresh vegetables declined by 11.16 %, while prices of fresh fruits Yield stability still remains safeguarded despite the CBE’s decision to scrap the repatriation increased by 15.65 %, respectively. Together they contributed by negative 0.99 percentage mechanism and is expected to remain as such until the next phase of the CBE’s monetary points to monthly headline inflation easing cycle The non-bank financial servces industry commenced the year by reaping the benefits of its un-tapped potential witnessing solid growth for the first four months in 2019 in all sectors Micro-finance Mortgage Finance Leasing 5.2 1.5 280 15.0 4.0 1.0 259 250 2.9 6.0 300 2.8 216 5.0 5.1 0.9 2.3 12.7 1.0 10.0 0.7 1.8 11.6 4.0 200 5.0 0.6 4.6 2.0 4.8 4.1 4.9 4.8 5.0 2.0 100 0.5 7.1 2.4 4.6 4.7 4.5 0.0 - - - 4.4 0.0 Jan-19 Feb-19 Mar-19 Apr-19 2016 2017 2018 Q1 2019 Jan-19 Feb-19 Mar-19 Apr-19 O/S Portfolio (EGP bn) Active Borrowers (Million) O/S Portfolio No. of Contracts (000's) Total Contract Value (EGP bn) No. of Contracts The Microfinance industry is one of the most un-tapped With the inflationary pressure on real estate prices rising, Growth was driven by an increase in demand in all leasing markets in Egypt allowing total loans to reach a record EGP mortgage financing witnessed moderate growth over the products including equipment, machinery and real estate 12.7 billion past years due to the high interest rate environment Source: CBE & Financial Regulatory Authority 2

2 Consolidated Results

Key Consolidated Metrics H1 2019 H1 2019 Total Revenues Consolidated Results Net Operating Profit Operating Profit Margin EGP 1.1 bn EGP 343.9 mn 30.0% Group ↑ 35% y-o-y ↑ 31% y-o-y H1 2018 EGP 848.9mn H1 2018 EGP 263.2mn H1 2018 31.0% Hig ighlights Cost-income 1 (%) Net Profit Margin Annualized Return on Av. Equity (ROAE) 17.6% 23.3% 20.5% H1 2018 28.7% H1 2018 20.0% Net Income By Business Line H1 2018 H1 2019 IB & IB & Holding, Holding, 26% 30% Leasing, EGP EGP +38.8% y-o-y Leasing, 149.7 207.7 45% 52% mn mn Micro- Micro- finance, finance, 22% 25% 1. Cost- income is calculated as people’s cost and other SG&A divided by total revenue 4

H1 2019 Summary Consolidated Income Statement Consolidated Results Results commentary (EGP mn) H1 2019 H1 2018 % Change Statement of f Consolidated Revenue 1,145.4 848.9 34.9% Consolidated revenue grew 34.9% y-o-y given strong growth in revenues from the financing business. NBFS made up 81.3% of Profit & Loss Leasing 768.2 454.7 68.9% consolidated revenue while the investment bank along with the holding company represented the remaining Micro-finance 163.5 140.1 16.8% 18.7%. Investment Bank & Holding 213.7 254.2 -15.9% Total operating expenses grew 36.9% y-o-y due to an increase 56.4% in financing costs Operating Expenses (801.5) (585.7) 36.9% y-o-y to reach EGP 535 million to accommodate the group’s robust operational expansion in its financing Finance cost (535.0) (342.1) 56.4% business. People’s Cost & Other SG&A represented 23.3% of revenue, down from 28.7% in the People Cost & Other SG&A (266.5) (243.6) 9.4% comparable year. Net Operating Profit 343.9 263.2 30.6% Net operating profit grew 30.6% y-o-y on the group’s strong operational performance Net Operating Margin 30.0% 31.0% Net profit after tax and minority reached EGP 207.7 mn in H1 2019, representing an Net Profit After Tax & Minority 207.7 149.7 38.8% annualized ROAE of 17.6%. 5

H1 2019 Summary Consolidated Balance Statement Consolidated Results (EGP mn) 30-June-19 31-Dec-18 Results commentary Settlement guaranteed fund 8.3 10.2 PP&E 129.3 125.3 Total assets grew 24.5% since Dec-18 Goodwill 348.8 348.8 on the back of higher lease bookings Lease Receivables 6,605.0 4,965.8 Bala lance Sheet Securitization difference, net 263.1 237.7 during the quarter which resulted in a Other non-current assets 23.1 16.7 larger leasing portfolio . Non-current assets 7,377.7 5,704.5 Lease Receivables 1,230.4 866.4 Cash and cash equivalents 1,342.5 1,214.8 CI Capital Holding for Financial Debit clients 1,793.9 1,635.2 Investments has adopted the new Clearing accounts – Debit 15.7 0.6 Egyptian Accounting Standard EAS 49 Other current assets 107.3 113.5 in relation to its leasing subsidiary Current assets 4,489.9 3,830.5 effective from Q2 2019. The new EAS Total assets 11,867.5 9,535.0 49 brings lease accounting more in line Paid-in capital 544.2 544.2 with IFRS 16 and requires changes and Retained earnings 964.5 829.3 Share premium reserve 858.5 858.5 restatement to prior periods’ figures Other 63.2 65.3 with implications on both the Shareholders’ equity (Parent company) 2,430.4 2,297.3 consolidated income statement and Shareholders’ equity (Non -controlling balance sheet. Comparative and Q1 151.6 138.6 interest) 2019 financials have also been restated Total shareholder’s equity & minority 2,582.0 2,435.9 to comply with the new standard. interest Long-term loans & facilities 6,094.2 4,511.3 Other Long Term Liabilities 181.8 164.8 LT & ST loans and facilities increased Non-current liabilities 6,276.0 4,676.0 35.1% and 27.9% respectively since Short-term loans & facilities 1,840.6 1,438.6 Dec-18 to accommodate the increase Credit customers 528.7 268.5 Other Short Term Liabilities 640.2 715.9 in financing business portfolio (grew Current liabilities 3,009.5 2,423.0 28.4% since Dec-18). Total liabilities & equity 11,867.5 9,535.0 6

3 Business Lines’ Performance

H1 2019 Business Lines’ Performance Leasing Revenue – EGP mn Contribution to Net Profit 768.2 NBFS – Leasing, 454.7 52% Leasing H1 2018 H1 2019 Total Outstanding Leasing Portfolio Net Interest Income – EGP mn Corplease’s leasing Net interest income 180.3 8.1 portfolio grew 53% y-o-y grew 41% y-o-y on a 127.8 as economic recovery 5.3 larger outstanding continues portfolio H1 2018 H1 2019 H1 2018 H1 2019 Key Gr Growth Driv Drivers New Bookings Market Share 1 Net Interest Margin (NIM) EGP 2.5 bn 21.2% 5.1% + 49.2% y-o-y 1. The lasts publically available date published by the FRA from Jan 2019 to May 2019 8

H1 2019 Business Lines’ Performance Microfinance Revenue – EGP mn Contribution to Net Profit 163.5 NBFS – Micro-finance Micro- 140.1 finance, 22% H1 2018 H1 2019 Total Microfinance Loans Outstanding Net Interest Income – EGP mn 660.0 Reefy capitalized on its The expanding loan book 118.0 diverse geographical 596.3 91.4 resulted in significant presence to grow it loan growth in net interest book by 11% y-o-y income H1 2018 H1 2019 H1 2018 H1 2019 Key Gr Growth Driv Drivers Number of Branches Number of Active Borrowers Monthly Disbursements (Average) 50 98.5 k EGP 95.4 mn + 9.5k y-o-y 9

H1 2019 Contribution to Net Profit IB & Holding Revenue – EGP mn Business Lines’ Performance IB & 266.8 Investment In Holding, 212.8 26% Bank & Holding H1 2018 H1 2019 Revenue By Line of Business - EGP mn IB & Holding Net Profit 212.8 35.6 33.7 57.0 19.3 124.2 43.6 Brokerage Asset Mgmt. IB Advisory Capital Markets Total & Treasury H1 2018 H1 2019 Key Performance Indicators IB Advisory Revenues Research - Stocks Brokerage - Market Asset Management - Covered Share 1 AUM’s 114 EGP 33.7 mn 9.7 % EGP 9.1 bn + 10% y-o-y - 37.9% y-o-y 1. Market Share is for transactions on the main market excl. deals. Source: EGX 10