CRESUD & IRSA Investor Day November 2...Clal Insurance 29.8% 3,434 1,024 1,504 Clal swaps 25% 37...

1Page© 2017 CRESUD. All rights reserved.1

CRESUD & IRSA Investor Day New York City – November 2nd, 2018

2Page© 2017 CRESUD. All rights reserved.

Disclaimer

• This presentation includes general and financial information regarding IDB/ DIC and/or companies held by it (together the

“IDB/DIC Group”), including financial information relevant for Q2-2018, and immediate reports submitted by IDB/ DIC Group to

the Tel Aviv Stock Exchange.

• It is noted that this presentation may include projections, valuations, perspectives and certain other forward-looking statements

and information. Such forward-looking information is based on IDB/ DIC Group's current analysis and valuations, according to the

information known to it. Such projections, valuations, perspectives and other forward-looking statements, and are subject to

changes.

• It should be noted that the information contained herein should not be construed as an offer to buy or sell securities of the IDB

Group, nor an invitation to receive such offers, and is designed, as aforesaid, for the provision of information only.


Israel’s Macro Economic Key Figures


Top country in terms of GDP/capita and Doing business Ranking

GDP per-capita in 2017(thousands of USD)

80,8

59,5

44,2

41,2

39,7

31,6

28,2

20,6

Switzerland

US

Germany

Israel

France

Italy

Spain

Portugal

Source: IMF Source: Doing Business Ranking 2017 (World Bank)

Doing business Ranking index 2017(1: Easy– 200: Difficult)

190

188

117

108

94

82

78

60

59

58

55

54

34

33

31

29

28

20

14

7

6

2

1

Somalia

Venezuela

Argentina

Paraguay

Uruguay

Sudáfrica

China

Turquía

Colombia

Perú

Chile

Israel

Japón

Suiza

Francia

Portugal

España

Alemania

Australia

Reino Unido

US

Singapur

Nueva Zelandia


40% 41% 42% 42% 46% 51% 51% 57% 61% 61% 64% 68% 73% 74% 78% 87% 90% 98% 99% 103%105%126%131%

176%

253%

-30%

20%

70%

120%

170%

220%

270%

40% 41% 42% 42% 46%46% 51%51% 51%51% 5757%% 61% 61% 64% 68% 7373%% 7474%% 7878%% 8787%% 9090%% 98%98% 9999%% 103103%%105%105%126%131%

176%

253%253%

-3-30%0%

20%

70%

120%

170%

220%

270%

6,2%

3,0%

1,5%

5,5%5,2%

2,2%

4,2%

3,5%

2,6%

4,0%

3,3% 3,4% 3,5%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F

Stable growth of the economy while keeping low leverage

Israel GDP Growth2018 & 2019F

SOURCE: Bank of Israel

OECD – Debt/ GDP


107,7

80

85

90

95

100

105

110

115

120

125

130

Israel 12 per. media móvil (Israel)

Stable growth of the economy, resilient consumers and low unemployment

Unemployment Rates %Yearly Figures

SOURCES: BNHP Economics Department, Bloomberg

Consumer ConfidenceJanuary 2007 = 100

SOURCE: Bank of Israel

7%

4%

4%

5%

6%

7%

8%Unemployment


1,5%

2,5%

3,5%

4,5%

5,5%

6,5%

3.7

3

3,5

4

4,5

5

5,5

6

10/2000 10/2002 10/2004 10/2006 10/2008 10/2010 10/2012 10/2014 10/2016 10/2018

Low inflation risks, real exchange appreciation and low cost of financing

Israeli Bond Yields (10 Years)

2,7%

2,2%

1,6%1,8%

-0,2%

-1,0%

-0,2%

0,4%0,7%

2010 2011 2012 2013 2014 2015 2016 2017 2018F

Annual CPI rate of change

SOURCE: CBS SOURCE: Bank of Israel

SOURCE: Bloomberg

Exchange rate against the dollar

Rating Agency 2008 2018

Standard & Poor's A AA-

Moody's A2 A1

Fitch A- A+


IDB’s & DIC’s portfolio


100.0% 78.15%

98.7%

Dolphin*

Current Corporate Structure

* There is a non recourse intercompany loan between Dolphin (borrower) and IDB (lender) due to the transference of DIC shares. This loan is guaranteed with ~116 .4 (76.5%).

43.1%100% 29.81%**18.1% 68.8% 64.4% 50.3% 33.5%

IDBG

50.0% 45.4% 51.7% 100%

50.0%

Energy Tourism InsuranceFinancial

InvestmentsTelecommunications Real Estate Technology Supermarket

Agriculture Rental PropertiesShopping center and

offices in Las VegasRetail & Logistics

Steady Growing Businesses

Opportunity & Challenging Businesses

**IDB engaged into swaps transaction on additional 25% of Clal shares.


PBC & Gav Yam: Leading real estate companies in Israel

Main tenants

1,160,000 sqmin Israel

97%occupancy

670,000 sqmLand reserve

142,000 sqmin USA

HSBC building (Manhattan) Tivoli (Las Vengas)


Steady growing: PBC Group Leading Real Estate Company In Israel

üOperates in several real estate segments:

•Office and logistic centers in Israel –sqm 1.2million.

•Office USA – owns of HSBC tower in Manhattan.

•Residential developer.

•Shopping centers: Israel & Las vegas.

üGrowth:

•NOI:NIS 705 MM (2018) vs NIS 564 MM (2014).

•GLA: sqm 1.2 million (Q2 2018) vs. sqm 1.0 million (2014).

üHSBC Tower:

• purchase* USD 350 MM (2009) vs USD 920** MM (Q2

2018).

•NOI run rate USD 48 MM.

•Occupancy 100%.*50% purchased in 2009 additional 50% purchased from a related party in 2011.

**book value as of 30.6.2018

11Page

Revenues (NIS MM)

300

400

500

600

700

800

900

2010 2011 2012 2013 2014 2015 2016 2017 2018

70%

HSBC Tower, Manhattan

USD/ILS 3.704 as of 30/10/2018


Steady growing: Gav Yam - Market Leader

üBusiness focus - Tech Industry:

üTop tier tenants.

üShare price yield 124% over the last 5 years.

üSteady Growth while deleveraging:

•EBITDA:NIS 406 MM (2018) vs NIS 328 MM (2014).

•GLA: sqm 899 k (Q2 2018) vs. sqm 808 k (2014).

•Credit rating: ilAA (2018) vs il A+ (2014).

üOpportunities:

•Assets under development: sqm 194 k.

•Future development : sqm 618 k.

Top Tier Tenants

GLA (thousand sqm)

500

600

700

800

900

1.000

1.100

2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018 Q1 2021

e

46%

USD/ILS 3.704 as of 30/10/2018


Gav Yam: Leading commercial real estate company in Israel

REHOVOT NEGEVMATAM-YAM

TOHA

8 Projects under development, planning & marketing

194,000 sqm

The New Haifa Bay – Logistic Center


3,0%4,0%

6,0%

9,0%

11,5%

13,5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2013 2014 2015 2016 2017 Q1-Q2

2018

Steady growing : Shufersal Israel’s Largest Retailer

üLargest retailer in Israel - market cap NIS 5.5 billion.

üHolds a real estate portfolio of ~ NIS 3 billion

üShare price yield 36 months – 136%.

üOperational efficiency:

•NIS 400 MM investment in Shoham logistic center.

• EBIT margin 2.5%(2015) vs. 4.4% (Q2 2018)

üStratigic Investments for current and future growth:

•Pharm: acquisition of New Pharm

•Online: logictic centers.

•Private lable: 24% of revenues.

•Shufersal buisness- cash and carry.

•Finance.

•Distribution – American outlets.

Online Sales - % of Total SalesOnline Sales - % of Total Sales

USD/ILS 3.704 as of 30/10/2018


Opportunity & Challenging: Cellcom Largest Cellular Provider

üIsrael’s largest cellular provider – 2.8 million subscribers.

üCompetition:

•Operates in competitive environment -5 cellular providers.

•Cellular :ARPU NIS 51.8 vs ~ NIS 163 in the US.

üTransition from cellular company to communication Group:

ü Offers bundle package that includes Cellular, TV,

Telephone & Internet.

üInvestment:

•Fiber.

•TV

üOpportunities:

• Infrastructure(fiber & 5G).

•Operational efficiency.

•Lower competition.

20

63

111

170

195

0

20

40

60

80

100

120

140

160

180

200

2014 2015 2016 2017 Q2 2018

Cellcom TV subscribers (thousand)

up:

USD/ILS 3.704 as of 30/10/2018


-309-266

-335

-248

265

-400

-300

-200

-100

0

100

200

300

Opportunity & Challenging :Clal Insurance

üOne of the largest insurance companies in Israel.

üAssets under management (AUM) over NIS 195

billion.

üMarket cap NIS 3.4 billion 68% on its book value.

üOpportunities and challenges:

• Interest rate: accumulated lost due to low interest

rate NIS 877 MM.

•New management.

•Solvency II.

•Dividend policy.

•Operational efficiency.

•Technology.

Market Cap vs. Book Value

1.000

2.000

3.000

4.000

5.000

6.000

7.000

Equity Market cap

Low Interest effect on Clal income

(NIS MM)

2014 2015 2016 2017 Q1-Q2 2018

NIS -877 MM

USD/ILS 3.704 as of 30/10/2018


IDB/DIC Main Financial Moves, outcomes, challenges & opportunities


Assets sales at attractive values, above market expectations

ADAMA: Leading agrochemical company (2016)

ü DIC sold it’s 40% stake in Adamato ChemChina

ü Price: USD 230 million in excess ofloan assignment of USD 1.17 billion

ü Transaction completed onNovember 2016.

ü DIC’s profit NIS 981 million.

40% 60%

Real Estate Assets for NIS 400 million (2017)( )

2017 CRESUD. All rights reserved.

Residential Developments in

India

Hilton Hotels

(London – Cardiff – Birminghan)

Shufersal Stake (2018)

ü DIC sold a 16.6% stake in Shufersalfor NIS 854 million.

ü Reducing Stake & accountingdeconsolidation

ü Gain recognition IVQ 18: ARS 8.5billion.

ü DIC’s profit NIS 1,232 million.

Stake reduced from

50.1% to 33.5%

USD/ILS 3.704 as of 30/10/2018


Centralization Law

üFinance- Real :

• separation between significant real and significant finance corporations.

üPyramid Structure:

•Maximum 2 layers.

•Current Structure:DIC

Gav Yam MehadrinIspro

PBC

I.

II.

III.


IDBD & DIC NAV As 31/10/2018

NIS MM Share Market

value

Holding

Value

Book

Value

Clal Insurance 29.8% 3,434 1,024 1,504

Clal swaps 25% 37 436***

Loan to

Dolphin100% 1,197 1,197 2,049**

IDB Tourism 100% 179 179

IDBG 50% 204 204

Modi’in 18.1% 139 25 25

Others 39 39

Total assets 2,705 4,436

Net debt(22.08.2018)* (2,215) (2,215)

NAV 490 2,221

NIS MM Share Market value Holding

Value

Shufersal 33.6% 5,584 1,874

Cellcom 43.1% 2,692 1,161

PBC 64.4% 1,681 1,083

Elron 50.3% 360 181

Epsilon 68.8% 69

Others 112

Total assets 4,478

Net debt(22.08.2018) (2,538)

NAV 1,940

LTV 57%

Book value as of 30.6.18 2,679

Liquidity as of 22.8.2018:

IDB: NIS 1,008 MM

DIC: NIS 2,439 MM

*based on Clal book value as of 30.6.18

**based on DIC book value as of 30.6.18 – 76.5%

***Based on Clal book value per share as the closing price of the swaps transactions

USD/ILS 3.704 as of 30/10/2018


Thank You

CRESUD & IRSA Investor Day November 2...Clal Insurance 29.8% 3,434 1,024 1,504 Clal swaps 25% 37...

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Transcript of CRESUD & IRSA Investor Day November 2...Clal Insurance 29.8% 3,434 1,024 1,504 Clal swaps 25% 37...