Results Presentation Quarter ended 31 Mar 2015 0 22 April 2015
Disclaimer This presentation is being made only to, and is only directed at, persons to whom this presentation may lawfully be communicated (relevant persons). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation does not constitute or form part of, and should not be construed as, an offering of securities or otherwise constitute an invitation, inducement or recommendation to any person to underwrite, subscribe for or otherwise acquire securities in any company within the DAMAC group (the Group). Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results expressed or implied in these forward-looking statements. Forward-looking statements speak only as of the date of this presentation. 1
Group Structure DAMAC group structure Notes: 1) As at 31 Mar 2015, DAMAC Real Estate Development Limited (DRED) is a wholly Public shareholders Majority shareholder owned subsidiary of DAMAC Properties Dubai Co PSC (DPDC) , a public joint stock company now listed on Dubai Financial Market (DFM) 14.28% 85.72% 2) Financial information of DPDC entirely reflects result of operations of DRED from 1 st July DAMAC Properties Dubai Co PJSC (listed on DFM) 2014 onwards. 3) Following presentation relates to performance of DRED, our operating subsidiary, whose 100% reporting currency is US dollar. A fixed exchange rate of US$/AED= 0.2721 is used in the whole presentation DAMAC Real Estate Development Limited (DRED is sole operating subsidiary and owner of all real estate assets) Timeline of how DPDC acquired ownership interest in DRED 30 Jun 2014: Acquired controlling interest 9 Jan 2015: GDR exchange offer 16 Mar 2015: Statutory squeeze out of 85.72% from majority shareholder increased ownership to c.99.63% raised shareholding to 100% DPDC, a public joint stock company Pursuant to an exchange offer by DPDC initiated a statutory now listed on Dubai Financial Market DPDC that closed on 9 Jan 2015, squeeze out process, pursuant to (DFM) acquired 85.72% of the GDR holders holding c.97.44% elected which it compulsorily acquired all ownership interest in DRED and to exchange their GDRs in DRED for of the remaining GDRs of DRED became the new holding company shares in DPDC at an exchange ratio by 16 March 2015 for the group. of 23.0769231 shares for each GDR. 2
DAMAC overview Headquarters in Dubai Portfolio Overview Completed (1) In-progress (2) and In-planning (3) 7 54 c.10,000 projects projects mn sq ft development countries with projects in- Hospitality units pipeline progress and in-planning in-progress and In-planning 13,865 units c.37,000 units Total: c.2,100 600+ 450+ c.91% In Dubai: 93% employees sales staff in over 12 sales Project execution and offices execution support team Note: Exchange rate US$/AED= 0.2721 used in the whole presentation (1) Completed projects: projects with Building Completion (BCC) received US$760mn US$486mn c.91% (2) In-progress projects: projects with enabling works started / consultant appointed (3) In-planning projects: projects with no consultant appointed Booked Sales in Q1 2015 Revenue in Q1 2015 of customers are non- UAE nationals (2007-Q1 FY 2014 - $3.1bn FY 2014 - $2.0bn 2015 sales value) Strong delivery track record across economic cycle Performance highlights 64% 28% 3.5% YoY QoQ YoY 13,865 Units Completed 8,534 Booked Sales ($ mn) Dubai - Revenue ($ mn) 12,844 units 3,138 2,010 2,458 3,257 Outside 1,224 Dubai - 2,074 1,021 units 486 764 During Cumulative Pre-crisis Post-crisis Crisis up to 31 upto 2008 2012-1Q15 2009-11 Mar 2015 2013 2014 Q1 2015 2013 2014 Q1 2015 Note: Sales Booking data as of 31 Dec 2013,31 Dec 2014 and 31 Mar 2015 respectively 3
Q1 2015 Performance highlights Revenue +11% Gross profit +16% Operating profit +6% $485.9m $309.6m $217.2m (Q1 2014: $435.8m) (Q1 2014: 267.5m) (Q1 2014: $204.9m) Net cash flow from Net profit +3% Total assets +8% operating activities $215.8m $299.5m $5,554.7m (Q1 2014: $209.6m) (Q1 2014: $328.9m) (Dec'14: $5,122.7m) Equity +15% Cash and Bank +21% Gross Debt +11% $1,649.4m $2,185.7m $797.7m (Dec'14: $1,433.6m) (Dec'14: $1,799.3m) (Dec'14: $719.6m) Debt to Total Assets Gross Margins +2.3ppt Booked Sales 14.4% 63.7% $764m (Dec'14: 14.0%) (Q1 2014: 61.4%) (Q4 2014: $738m) 4
Financial Review Revenue and Cashflow from Q1 2015 highlights Capital Structure Profitability Operations Revenues grew 11% to $485.9mn in Q1 2015 Revenue ($mn) Cash flows from Operations ($mn) Profit for the period ($mn) (Q1 2014: $435.8mn). Revenue from sale of 400 Gross Margins % (RHS) Other 972 Other 1043 Liabilities Assets land on villa units in our mastership AKOYA 600 80% 329 64% developments drove higher revenues. 61% 300 300 500 60% Cash & 2136 Advances 2186 Gross margins at 63.7% in Q1 2015 Bank from 400 customers 40% marginally higher vs last year due to revenue 200 300 798 mix. Borrowings 20% 200 Dvlpmnt Net profit grew 3% to $215.8mn in Q1 2015 2327 100 Properties Sharehold 1649 0% er’s Equity 100 (Q1 2014: $209.6mn) 436 210 486 216 0 -20% 0 Net Cash generated from operating Liabilities Assets Q1 2014 Q1 2015 Q1 2014 Q1 2015 activities at $299.5mn (Q1 2014: $328.9mn) Development Advances from Total Assets up 8% during the quarter, mainly Total Assets Properties Customers led by $386.4mn increase in ‘Cash & Bank balance’ Completed units ($mn) Total Assets ($mn) Advances from Customers ($mn) Properties under development ($mn) Dvplmt Prop + Cash as % of TA (RHS) Development properties and cash continues to Land held for development ($mn) 2,200 3,500 100% contributes 81% to total assets. 2,328 2,327 2,500 81% 81% 213 Advances from customers stood at 3,200 80% 311 2,000 2,100 $2,136.1mn as at Mar’15.(Dec’14: $1,985.1mn) 2,900 60% 1,500 Parent company DAMAC Properties Dubai 1,974 2,600 40% 1,876 1,000 2,000 Co. PJSC listed on Dubai Financial Market on 12 th Jan 2015. 2,300 20% 500 5,123 5,555 1,985 2,136 2,000 0% 140 140 1,900 0 Dec'14 Mar'15 Dec'14 Mar'15 Dec'14 Mar'15 5
Statement of Financial Position Development Properties - Mar’15 ($ mn) In US$ mn Mar'15 Dec'14 Change ASSETS 140 Property and equipment 19.0 16.3 2.7 Land held for 213 Development properties 2,326.5 2,327.5 (1.0) future Other financial assets 219.1 232.0 (12.9) development Trade and other receivables 799.4 742.6 56.8 Financial investments 5.0 5.0 0.0 Properties under Cash and bank balances 2,185.7 1,799.3 386.4 development Total Assets 5,554.7 5,122.7 432.0 EQUITY AND LIABILITIES Completed 1,974 Equity properties Share capital 650.0 650.0 0.0 Statutory reserve 41.3 41.3 0.0 Group restructuring reserve (566.7) (566.7) 0.0 Shareholder's account 150.0 0.0 150.0 Trade and other payables - Mar’15 ($ mn) Retained earnings 1,374.8 1,309.0 65.8 Advances from Total Shareholders' Equity 1,649.4 1,433.6 215.8 Customers Liabilities 408 Accruals 124 Bank borrowings 153.1 75.3 77.8 Sukuk Certificates 644.6 644.3 0.3 239 Other payables Due to related parties 9.5 11.0 (1.5) Provision for employees’ end of 8.5 7.9 0.6 183 service indemnity Retentions payable Trade and other payables 3,089.6 2,950.6 139.0 2,136 Total Liabilities 3,905.3 3,689.1 216.2 Deferred consideration for Total Shareholders' Equity & 5,554.7 5,122.7 432.0 land payments 6 Liabilities
Statement of Comprehensive Income In US$ mn Q1 2015 Q1 2014 Growth Revenue Gross Profit Revenue 485.9 435.8 11% Gross Profit ($ mn) Revenue ($ mn) Cost of sales (176.3) (168.3) 5% Gross profit 309.6 267.5 16% 16% 11% Gross profit margin 63.7% 61.4% 600 486 400 Other operating income 4.2 2.2 91% 500 436 310 268 300 General, administrative and selling 400 (79.5) (49.9) 59% expenses 300 200 Brokerage commissions (16.0) (13.9) 15% 200 100 Depreciation (1.1) (1.0) 10% 100 Operating profit 217.2 204.9 6% 0 0 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Operating profit margin 44.7% 47.0% Other Income 2.5 2.5 0% Finance Income 5.2 3.0 73% Operating Profit Net Profit Finance Costs (9.1) (0.8) 1038% Operating Profit ($ mn) Net Profit ($ mn) Profit/(Loss) for the period 215.8 209.6 3% Items that may be reclassified 3% 0.0 0.5 NA 6% 300 subsequently to profit or loss 300 Total Comprehensive Income 215.8 210.1 3% 216 210 217 200 Net income margin 44.4% 48.2% 205 200 100 0 100 Q1 2014 Q1 2015 Q1 2014 Q1 2015 7
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