Efg Holding S.A.E. · EGX:HRHO
Efg Holding S.A.E — EFG-Hermes — Euromoney Conference Saudi Arabia (2006)
30 slides from Efg Holding S.A.E's conference presentation, Oct 16, 2006
Slide 1: EFG-Hermes: One Region, One Investment Bank
EFG Hermes Research EFG-Hermes One Region, One Investment Bank 1
Slide 2: Outline
Outline - Part I - Trading Values for Selected Regions - EFG-Hermes Fee Pot - Competitive Edge - Part II - Financial Snapshot - Part III - Business Divisions in a Nutshell - To Do List 2
Slide 3: Part I
Part I Trading Values for Selected Regions EFG-Hermes Fee Pot Competitive Edge 3
Slide 4: Trading Value Per Day for Selected Regions – USD m
Trading Value Per Day for Selected Regions – USD m GCC, Levant & Egypt 9,198 South East Asia 8,343 Eastern Europe 1,946 Latin America 1,086 - 1,0002,000 3,0004,000 5,0006,000 7,0008,000 9,00010,000 Source: Arab Monetary Fund and Standard & Poor’s research. * Average Daily Value Traded of the 2nd H 2
Slide 5: Trading Value Per Day for Selected Markets – USD m
Trading Value Per Day for Selected Markets – USD m Saudi Arabia 8,043 Turkey 806 UAE 419 Russia 760 Kuwait 326 Czech Republic 162 Egypt 261 Poland 124 Jordan 97 South Korea 5,217 Qatar 88 Malaysia 184 Lebanon 25 Brazil 660 Oman 17 Mexico 217 Bahrain 4 Argentina 80 Source: Arab Monetary Fund and Stan
Slide 6: EFG-Hermes Estimated Fee Pot by Division
EFG-Hermes Estimated Fee Pot by Division GCC, Levant & Egypt Investment Banking Asset Management Brokerage US$ 300 - 400 US$ 350 - 450 US$ 4,500 - million million 5,500 million US$ 5 to 6 billion in Source: EFG-Hermes estimates annual fees 6
Slide 7: EFG-Hermes Geographical Fee Pot Breakdown
EFG-Hermes Geographical Fee Pot Breakdown Geographical Fee Pot Breakdown EFG-Hermes Target Market Share Today 2009 Lebanon Jordan Qatar Kuwait UAE Egypt Saudi Arabia ? 4-5% ? 1% 3% 5% 35-40% 30% + 5% 8% 4-5% 7% 8% NA ? 71% NA ? NA 15% 5% 15% Source: EFG-Hermes estimates 7
Slide 8: Competitive Edge
Competitive Edge Selective Addition & Retention of Human Resources: 60 key employees are part of a 4-5 year management stock- based incentive scheme of which over 20 are ex-global investment banks Local market leader (Egypt) #1 Brand in the MENA region by virtue of largest: fee revenue (USD140
Slide 9: Competitive Edge
Competitive Edge Credible reputation among clients and shareholders World-class research coverage Strong placement power due to diversified client relations (local, regional and western) Stronger financial support and regional reach through the acquisition of 20% of Bank Audi 9
Slide 10: Human Resources Evolution
Human Resources Evolution 600 Head Count 487 500 431 95 400 76 300 11 200 392 361 272 281 100 0 Dec-03 Dec-04 Dec-05 1Q06 Egypt Region 10
Slide 11: Financial Snapshot
Part II Financial Snapshot 11
Slide 12: Income Statement Highlights
Income Statement Highlights EGPm 1000 831 800 600 350 400 198 147 200 53 6 0 2003 2004 2005 Revenues Net Income Source:EFG-Hermes 12
Slide 13: Revenue Diversity
Revenue Diversity EGP m 400 338 350 300 250 217 182 200 128 137 150 96 104 100 50 0 2002 2003 2004 1Q05 2Q05 3Q05 4Q05 Brokerage - Egypt Brokerage - UAE IB AM PE Source:EFG-Hermes 13
Slide 14: Profitability
Profitability High level of profitability in all divisions NOP Margin* 90% 76% 79% 75% 76% 80% 66% 70% 62% 60% 51% 51% 49% 50% 40% 30% 21% 24% 20% 10% 0% Securities A. M P.E I.B Dubai** Consolidated 2004 2005 *Adjusted to include operating expenses for the holding company and other non-revenue makin
Slide 15: Audi Acquisition – Rationale of the Deal
Audi Acquisition – Rationale of the Deal The 20% stake does offer us a foothold into a commercial bank with truly regional operations that can compliment ours and that will provide us with the following: • A steady stream of profits giving us good protection against the vulnerability of capital mark
Slide 16: Capital Increase
Capital Increase The acquisition of 20% of Banque Audi with a total consideration of around USD454 million is being financed through a capital increase First tranche: Completed through a private placement giving priority to existing shareholders and raised around USD320 million through the issuanc
Slide 17: Business Divisions in a Nutshell; To Do List
Part III Business Divisions in a Nutshell To Do List 17
Slide 18: Brokerage in Egypt; The Market Leader
Brokerage in Egypt; The Market Leader Revenues: Up 392% to EGP246 million in 2005 compared to EGP50 million in 2004, representing 31% of the group’s operating revenues. Profitability: Maintained its NOP margin of 67% in 2004 and 2005 Share of Daily Traded Values: Up to 47% of daily traded values in
Slide 19: Brokerage in Egypt; The Market Leader
Brokerage in Egypt; The Market Leader Introduction of New Services: - Multi-market, multi-currency brokerage system has enabled our brokerage teams to better serve clients as well as attract increasingly sophisticated new clients. - Call centre, introduced during last quarter has allowed the firm to
Slide 20: Brokerage in UAE; A Success Story
Brokerage in UAE; A Success Story Timeline: - December 2004: Started executions on Dubai Financial Market (DFM) - March 2005: Started executions on Abu Dhabi Stock Market (ADSM) - February 2006: Acquired a license to conduct brokerage activities from within the DIFC and became a member of the Dubai
Slide 21: Brokerage in UAE; A Success Story
Brokerage in UAE; A Success Story Introduction of New Services: - Multi-market, multi-currency brokerage system and executions confirmed by SMS - Call Center - E-trading is in testing phase with all its IT systems in place and fully in compliance with the stock exchange Share of Daily Traded Values:
Slide 22: Investment Banking in Egypt - Market Leader
Investment Banking in Egypt - Market Leader Revenues: EGP186 million representing 23% of the group’s operating revenues, increasing close to 7 folds compared to 2004 Profitability: NOP margin of 84% in 2005 up from 62% last year Market Share: Controls more than 80% of the deals that come to the Egyp
Slide 23: Investment Banking in Egypt - Market Leader
Investment Banking in Egypt - Market Leader USD m 10,000 (1) 8,563 M&A Transactions 8,000 6,000 4,000 1,771 1,766 1,766 1,766 1,766 2,000 771 424 384 319 - NBK Calyon DKW Hermes Capitalia J P Morgan Citigroup Lazard LLC Intesa SpA Sanp. IMI EFG- Banca SpA SpA (1) Based on completed reported deals in
Slide 24: Investment Banking Selected Deals - 2005
Investment Banking Selected Deals - 2005 Date Client Significanc Size Role e (US$) Joint Lead December 2005 20 %Initial Public Offering Largest privatization 900,000,000 Manager & US$ 900 million and equity floatation Bookrunner from the MENA region Joint Global Coordinator and Bookrunner December 2
Slide 25: Regional Advisor in Privatizations
Regional Advisor in Privatizations Telecom Egypt A Consortium Led by Advised on over 15 privatizations valued at more than Initial Public Acquisition of US$ 2.4 Billion representing 70-80% market share and Offering 33.38% of 10% to 20% of including the Suez Cement and the Ameryah Cement shares Sue
Slide 26: Investment Banking in UAE
Investment Banking in UAE Operations: Started in 2005 and announces its first landmark deal to float 20% of EITC, the second telecom operator in UAE for a total consideration in excess of USD650 million Backlog: A pipeline of USD1.46 billion is expected to materialize during 2006, which should stren
Slide 27: Asset Management
Asset Management Revenues: Up 232% to EGP212 million in 2005 compared to EGP62 million in 2004, representing 18% of the group’s operating revenues from local funds and 9% from regional funds. Revenue growth is mainly owed to improved market performance resulting in record incentive fees for the year
Slide 28: Asset Management in the Region
Asset Management in the Region Asset Management – UAE: Has been set up and has been operational since the third quarter of 2005 in the UAE. The team has focused on establishing strong front and back offices, developing relationships, and marketing to different prospects in the region. Owing to these
Slide 29: Private Equity
Private Equity Revenues: Up 150% in 2005 to reach EGP103 million, up from EGP41 million, representing 13% of operating revenues Profitability: NOP margin of 83% compared to 65% last year New Funds: - EHPE closed the Horus II Fund, for a total value of USD155 million during the last quarter of 2005.
Slide 30: To Do List
To Do List Retaining, attracting and breeding qualified human resources Expanding our AUM base Maintaining/increasing market shares in our current markets Acquiring the Saudi License Accessing new markets such as Jordan, Lebanon and Kuwait Creating synergies with Bank Audi to support our
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