Orascom Construction Limited January Presentation...  Core markets: Egypt, Saudi Arabia,...

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Transcript of Orascom Construction Limited January Presentation...  Core markets: Egypt, Saudi Arabia,...

  • Orascom Construction Limited

    January 2017

  • Highlights

    Backlog of USD 7.5 billion as of 30 September 2016 and pro forma backlog of USD 9.3 billion including 50% share in BESIX

    Ranked #34 on ENRs Intl Contractors list and #82 on Global Contractors list

    Proven track record of growth and shareholder value creation through entry into new markets and the creation of new industries

    Previously incubated cement, port and fertilizer businesses

    Currently focused on growing infrastructure investments portfolio to provide recurring cash flow and support long term growth

    Already co-developer and co-owner of Egypts first PPP project (Orasqualia) and well-positioned to capitalize on new investment opportunities

    Strategic shareholding of 50% in BESIX Group, a leading contractor with c.60% of EUR 3.3 billion backlog in MENA

    Provides partnership opportunities and exposure to complementary capabilities as well as a steady annual dividend stream

    Book value of USD 318 million

    Dual listing on NASDAQ Dubai and the Egyptian Exchange

    Shares traded on both exchanges are fungible

    2

    Global contractor focused on infrastructure, industrial and high-end commercial projects in the MENA and USA

  • Strong Track Record of Growth and International Expansion

    (1) Backlog as of 30 September 2016; excludes BESIX and other joint ventures accounted for under the equity method 3

    Growing Family Construction Business Incubating Cement, Port & Fertilizer Lines Building a Concessions Portfolio

    Roots trace back to 1950s in Egypt where first

    project was refurbishment of school wall

    Evolved into leading private sector contractor by

    the 1990s through partnerships with intl players

    Embarked on an ambitious drive in the mid-1990s

    to invest in cement and building materials

    IPO on the EGX in 1999 and acquired 50% of

    BESIX Group in 2004

    Currently executing projects in 10 countries

    compared to 4 at IPO

    Created a top 10 global cement producer in 12

    countries through greenfields and acquisitions in

    1990s-2000s

    Co-owned/built MEs first privatized BOT port in

    Egypt and divested stake in 2007 at a 49% IRR

    Divested cement group in 2007 and began

    growing fertilizer business

    Leveraged construction group and M&A to

    expand fertilizer business in Egypt, Algeria,

    Netherlands and USA

    Demerged from fertilizer group in March 2015

    Concessions portfolio to create both construction

    opportunities and recurring income and cash flow

    Already co-owner and co-operator of New Cairo

    Wastewater Treatment Plant, Egypts first PPP

    Pursuing infrastructure investment opportunities

    in Egypt such as Build, Own, Operate power

    plants

    Working on mirroring MENA strategy in USA to

    create additional long-term value

    History of Creating Value for Shareholders

    $335

    $3,068

    $3,882

    1999 2014 2015

    $1,495

    1999 9M 2015

    Growth and Geographic Expansion Organically and Through Acquisitions

    Revenue Growth (USD Million) Backlog by Geography(1)

    1,830

    Backlog Growth (USD Million)

    7,480

    BESIX

    50%

    $9,311

    9M 2016

    Egypt62.6%

    Saudi Arabia4.4%

    Algeria2.4%

    USA20.1%

    USA (OCI N.V.)7.5%

    Rest of World3.1%

  • A Wide Range of Capabilities Across Various Geographies

    4

    Orascom Weitz

    Contrack Watts BESIX Group

    Established in 1855

    Backlog: USD 860 million

    Core markets: USA licensed/registered in all 50 states and DC

    Expertise: commercial, industrial, infrastructure and plant services

    construction projects

    Established in 1909

    50% ownership

    Backlog: EUR 3.3 billion (100% share)

    Core markets: MENA and Europe

    Expertise: infrastructure and high-end commercial projects such as

    Burj Khalifa

    Established in 1950

    Leading MENA industrial and infrastructure contractor

    Backlog: USD 5.8 billion

    Core markets: Egypt, Saudi Arabia, Algeria and USA

    Expertise: infrastructure, industrial and high-end commercial projects

    Established in 1985

    Preferred US government contractor for the last 10 years

    Backlog: USD 857 million

    Core markets: USA (including Pacific Rim) and MENA

    Expertise: EPC services and facilities management for federal and

    infrastructure projects

    Orascom Construction Limited operates under three brands and owns 50% of BESIX Group

    Note: Backlog size as at 30 September 2016

  • Strategic Geographic and Sector Diversification

    United States

    27.6% of Backlog

    Egypt

    62.6% of Backlog Saudi Arabia

    4.4% of Backlog

    5

    Large geographic presence each region with an established customer base

    Note: Backlog contributions as at 30 September 2016 and excludes 50% share in BESIX

    Algeria

    2.4% of Backlog

    Rest of World

    3.1% of Backlog

  • Select Construction Track Record

    6

    Over 40 mtpa of cement

    production capacity around

    the world

    Over 12 mtpa of nitrogen

    fertilizer capacity in Egypt,

    Algeria and USA

    Over 17,000 MW of power

    generation projects in the

    Middle East

    Over 1,000km of rail projects

    in the Middle East (mainly

    Egypt and Saudi Arabia)

    Over 15 airports in the

    Middle East

    7 petrochemical projects

    (ex. fertilizer) in the Middle

    East

    Weitz licensed/registered to

    operate in all 50 states & DC

    First PPP project in Egypt

    (New Cairo Wastewater

    Treatment Plant)

    One of the largest players in

    Egypts road development

    program

    Key Cairo Metro player

    since the late 1980s

    Worlds largest swing rail

    bridge (in Egypt)

    Executed Assiut and West

    Damietta power plants in

    Egypt (1,500 MW) in under 8

    months

    Currently building the

    largest archaeological

    museum in the world (in

    Egypt)

    Repeat contractor for the US

    Army Corps of Engineers

    and other federal branches

    through Contrack Watts

    Largest desalination plant in

    the region (Algeria - Hamma

    desalination)

    Executing largest student

    housing complex in the US

    through Weitz

    First LEED Platinum in

    Africa (constructed in

    Egypt)

    Currently constructing over

    11,850 MW of power

    generation capacity in Egypt

    as an EPC contractor

    Note: Excludes BESIX Group; more information can be found on page 11

  • $3.32

    $4.87

    $3.84

    $5.83

    $6.66 $6.69

    $7.48

    $2.66 $2.62

    $1.23

    $4.88 $4.85

    $3.75 $3.49

    2011 2012 2013 2014 2015 9M 2015 9M 2016

    Backlog New Awards

    Healthy Consolidated Backlog Level

    Backlog Excluding BESIX Increased 11.8% in 9M 2016

    Note: Backlog excludes BESIX/JVs accounted for under the equity method and intercompany work

    Focus on pursuing quality projects where the Group has a competitive edge and is confident in the source of funding

    Growing US backlog to complement MENA operations and provide incremental value

    Pro forma backlog including the Groups 50% share in BESIX increased 11.5% to USD 9.3 billion as of 30 September 2016

    Consolidated backlog at USD 7.5 billion, providing sufficient future revenue and profitability coverage

    9M 2016 new awards of USD 3.5 billion signed in Egypt, Algeria and USA

    Q3 2016 new awards increased 56.5% y-o-y to USD 755.9

    Approximately USD 575 million of Q3 2016 new awards is attributable to Weitz and Contrack Watts in USA and the balance was awarded in

    Egypt

    USA new awards comprised mainly of infrastructure work in the Pacific Rim for Contrack Watts and commercial projects across Weitzs core

    markets

    7

  • Infrastructure74.9%

    Industrial11.2%

    Commercial13.8%

    FCY & FCY-priced73.6%

    EGP26.4%

    Orascom77.0%

    Weitz11.5%

    Contrack Watts11.5%

    Public76.8%

    Private15.7%

    OCI N.V.7.5%

    Egypt62.6%

    Saudi Arabia4.4%

    Algeria2.4%

    USA20.1%

    USA (OCI N.V.)7.5%

    Rest of World3.1%

    Strategic Backlog Diversification

    Note: Backlog breakdown as of 30 September 2016; backlog excludes BESIX/JVs accounted for under the equity method and intercompany work

    Backlog by Geography Backlog by Sector Backlog by Client

    Backlog by Brand Backlog by Currency Currency Exposure

    74% of the Groups total backlog is in FCY

    or priced in FCY

    c.42% of backlog in Egypt is in EGP

    FCY and FCY-priced backlog outweigh

    FCY costs in Egypt

    The Group incorporates cost escalation

    clauses in most EGP contracts to protect

    against potential cost inflationary pressures

    8

  • 2.5 2.8 2.1

    2.8

    4.2

    5.7 0.7 0.9

    0.8

    1.3

    1.4

    1.2

    1.2

    0.9

    1.5

    1.0

    0.6

    2011 2012 2013 2014 2015 9M 2016

    OCI N.V. Private Public

    2.7

    3.8 3.2

    4.4 5.0

    5.8 0.7

    0.8

    0.3

    0.7

    0.6

    0.9

    0.3

    0.3

    0.5

    1.0

    0.9

    2011 2012 2013 2014 2015 9M 2016

    Weitz Contrack Watts Orascom

    1.8 1.6 1.2 1.5

    3.2

    4.7 0.