#1ERC Egyptian Resorts Company Investor Presentation Q4 2012#2Disclaimer This presentation is intended for information purposes only and does not constitute or form part of an offer for sale or subscription or an invitation or solicitation of an offer to subscribe for or purchase securities of any kind and neither this document nor anything contained herein shall form the basis of any contract of commitment from any party whatsoever. Information, including but not limited to financial information, in this presentation should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities or any other instruments in or in entities related to ERC or any other company. This document contains important and privileged information on ERC and may not be reproduced in whole or in part, and may not be delivered to any person without the prior written consent of ERC, and therefore shall be kept secret and confidential by any receiving party. This document contains forward-looking statements. By their nature, forward-looking statements involve inherent risk and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. ERC does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. The information contained herein is expressed as of the date hereof and may be subject to change. Neither ERC nor any of its controlling shareholders, directors or executive officers or anyone else has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document. For the avoidance of doubt, the words "believe", "anticipate", "expect", "intend", "aim", "plan", "predict", "continue", "assume", "positioned", "may", "will", "should", "shall", "risk" and other similar expressions that are predictions of or indicate future events and future trends identify forward-looking statements.#3AGENDA Investment Highlights 2 3 4 LO 5 6 ERC - Egypt's Leading Master Developer Corporate History and Recent Events Sahl Hasheesh - ERC's Mega Resort Community Market Opportunity Summary Appendices#4Investment Highlights Master developer of mega resorts Premium mega resort on the Red Sea Unique business model with multiple recurring revenue streams 2 Strong management team with proven industry track record 4 Unique value proposition for sub-developers and residents 5 4 Investor Presentation 2012 ERC Egyptian Pesorts Company#5AGENDA 3 4 LO 6 Investment Highlights ERC - Egypt's Leading Master Developer Corporate History and Recent Events Sahl Hasheesh - ERC's Mega Resort Community Market Opportunity Summary Appendices 2#6ERC - Egypt's Master Developer ERC is a master developer and exclusive community manager of fully-integrated, world-class communities. The ERC Business Model: 1 Acquire broad acre land holdings suitable for high quality development at nominal value - Sahl Hasheesh land bank acquired in 1995 for an average of USD 1.32/m² 2 Create a master plan with some of the world's leading architectural and urban planning firms Manage the community and supply of utilities Implement design guidelines Develop prime residential and commercial real estate 3 Invest in comprehensive state-of-the-art infrastructure Market individual pre- designated plots Water | Sewage Treatment | Electricity | Communications | Road Network 4 Market individual pre-designated plots to sub-developers and investors Develop prime residential and commercial real estate: Old Town, Sawari and Jamaran ம 6 Implement design guidelines and community management rules and regulations 7 Manage the community and supply of utilities within the developments through our project partners and community management team Invest in comprehensive state-of-the-art infrastructure Create the master plan Acquire broad acre land holdings 6 Investor Presentation 2012 ERC Egyptian Pesorts Company#7ERC Business Model Investment → Land Identification/ Acquisition Master Planning + Infrastructure Investment • • . By world class master planners Design and construction guidelines and conditions + Water Desalination Plants and Networks Sewage Treatment Plants and Networks Electricity Sub-stations and Networks Communications Networks and Equipment Three Revenue Streams ERC leverages strong brand partnerships, a comprehensive development model and management structures that are transferable across projects and sectors - our ambition is to build a prolific regional master developer generating long term, sustainable revenue streams through 3 channels. 1 Land Sales 2 Strategic Real Estate Development 3 Community and Utilities Management • Land plots to developers for the construction of hotels, residential apartments, villas, golf courses and other leisure real estate properties • Land plot use is predetermined according to modern urban development plans Cash Generation Commercial Development (monopoly) • Commercial retail space for rent • Public concession areas Residential Development • Residential apartments for rent • Residential apartments for sale Other Strategic Assets ⚫ Marinas ⚫ Beaches • Golf courses • Other public areas Utilities • Water Sewage Electricity Communications Community Services • Maintenance and upkeep for public infrastructure, public areas and public buildings • Security provisioning for residents, visitors and workers ⚫ Waste management (provisioning and management) Community brand and reputation development • Future capital fund maintenance and management 7 Investor Presentation 2012 ERC Egyptian Pesorts Company#8AGENDA 2 4 5 6 Investment Highlights ERC - Egypt's Leading Master Developer Corporate History and Recent Events Sahl Hasheesh - ERC's Mega Resort Community Market Opportunity Summary Appendices 3#9Shareholder Information A successful public-private partnership with a stable shareholder base Legal Structure Egyptian Public Joint Stock Company Listing Egyptian Exchange (EGX) Authorized Capital (EGP) 2,000,000,000 Paid-in-Capital (EGP) 1,050,000,000 Free Float 31.91% | KATO Investment | 11.96% Rowad Tourism Company | 10.00% Nominal Share Value (EGP) 1.00 Other long-term investors 7.64% Fiscal Year December 31st ERC Tax Structure 10-year tax exemption ended 2007 Subsidiaries Sahl Hasheesh Co. (SHC) - 69.4% SHC Tax Structure 10-year tax exemption ending 2017 Employees 473 Shareholding Structure 4.50% Orascom Development Holding 8.05% 6.95% Misr Insurance Misr for Life Insurance First Arabian Company 10.00% 8.99% Al Ahly Capital Holding 9 Investor Presentation 2012 ERC Egyptian Pesorts Company#10ERC Corporate History 2012 2011 Design Construction 2010 • Marketing • Focus on completing key strategic assets 2009 Community Management • 2008 2007 2006 • 2005 Phase III master planning process begins 2004 Construction 2003 Marketing 2002 • • 2001 2000 • 1999 1998 1997 • Design • 1996 1995 2010-2012 onwards . New management augments existing internal structure taking company to next level in its lifecycle - key support functions included in HR plan Development of community services management and utilities reticulation Third regional five-star hotel begins operations ERC signs agreement with ODH to develop Sawari Marina in 2010 ERC signs MOU with Nikki beach in 2011 for management of boutique hotel Launched Jamaran residential villas project in 2012 Signed agreements to establish first hospital and pier management in 2012 2007 - 2009 First regional four-star hotel begins operations ERC begins considering additional land holdings to replicate business model 2004 - 2007 Unprecedented sales success based on relationship marketing and private roundtable negotiations 1999 - 2003 Aggressive marketing to counter tourism industry crash Appreciation of overall financial climate led to practical and market leading sales terms and development schedules 1999 Infrastructure work begins with Bechtel as project manager 1998 First plot sold for USD 37/m² 1996-1997 Incorporation Concept development and master planning for Phases I and II by RTKL 1995 Land acquired for first project - "Sahl Hasheesh" for USD 1.32/m² 10 Investor Presentation 2012 ERC Egyptian Pesorts Company#11Emerging from the Crisis: Another Opportunity The global financial crisis and the Jan 25 uprising have left Sahl Hasheesh with the opportunity to emerge as the destination of choice for investors Comfortable Cash Reserves, EGP 162 million ERC can comfortably spend on aggressive expansion plans for the coming 3-4 years even if receivables and sales performance remain below pre- crisis levels. Flexible Suppliers and Contractors Hard hit suppliers and contractors are willing to make attractive concessions at discount prices and favorable payment terms on projects that continue moving forward. Low Commodity and Raw Material Prices Labor and materials prices have fallen significantly from highs, creating a uniquely attractive infrastructure and construction investment climate to those with the cash to proceed. Developers Seeking Co-development Partners or Public Markets Liquidity Some privately-owned developers are looking to monetize their investments through the public markets. This may represent a land bank expansion opportunity. STRATEGY Growing strategic real estate projects: Sawari marina, Old Town commercial center and Jamaran are key projects that drive ERC's second revenue stream, increase Sahl Hasheesh's attractiveness and encourage widespread development. Supporting investment to boost the destination: Aggressive destination marketing will position Sahl Hasheesh as the destination of choice for visitors as well as developers resuming investment as tourism and second- home purchases regain momentum. Expanding land sales to key developers: Attracting investments through tailored products to developers' needs will be key to turn around the slow- down that started in 2008. Contingency Planning: In the unlikely event the TDA does not reverse its withdrawal of the Phase III land area, ERC has been actively building the capacity to shift the business model from a pure master developer to a mega B2C developer with over 3 million m² available for development over the next 9-12 years. ERC 11 Investor Presentation 2012 Egyptian Pesorts Company#12Delayed recovery relative to peers suggests strong rebound triggered by Phase III land plot issue resolution and/or acceleration of sales activity. 250 200 150 100 50 March 2012 - March 2013 (rebased to 100) ERC EGX30 TMGH -MNHD ODHN OCDI -PHDC 0 March-12 April-12 May-12 June-12 July-12 August-12 September-12 October-12 November-12 December-12 January-13 February-13 12 Investor Presentation 2012 ERC Egyptian Pesorts Company#13AGENDA 2 3 Investment Highlights ERC - Egypt's Leading Master Developer Corporate History and Recent Events Sahl Hasheesh - ERC's Mega Resort Community 5 Market Opportunity Summary 6 Appendices 4#14A rare and established global dive and sea-side destination Phase 3 Phase 2 Phase 1 Gaza Strip Alexandria Jordan Boves Eoyee Cairo Hurghada Sahl Hasheesh Luxor On program to become the No. 1 destination for sea-side hospitality, residential and entertainment developers 14 Investor Presentation 2012 ERC Egyptian Pesorts Company#15A master project roughly two-thirds the size of Manhattan Sahl Hasheesh is a unique, purpose-built Red Sea destination 18 kilometers south of Hurghada International Airport and approximately 470 kilometers from Cairo. The year-round development approximately two-thirds the size of the island of Manhattan is situated on a bay long-renowned as a world-class diving and sea-side destination and includes a 12.5-kilometer shoreline. - LOCATION + SIZE • 18 km south of Hurghada Int'l Airport 22 km south of Hurghada city center 470 km from Cairo 41 mn m²/10,000 acres/4,100 hectares Approx. two-thirds the size of Manhattan Length Range: From 7.0 to 8.0 km • Depth Range: From 4.5 to 6.8 km DIMENSIONS + • Bay Length: 12.5 km (7.8 miles) SHORELINE • UNIQUE CHARACTERISTICS • . • Gorgeous sandy beach, 9 km swimmable "Hasheesh❞ Island is a famous diving site An all sea-view resort Land elevations range from 0 meters above sea level at the front of the resort to 120 meters at the back- almost 40 stories high Year-round resort with moderate to hot weather and calm waters 15 Investor Presentation 2012 ERC Egyptian Plesorts Company#16WATG has completed the Master Plan of Phase III; it is now with the Tourism Development Authority for approval Phase 3 Phase 1 Phase III shapes and brings online phased districts totaling 28 million square meters, and is the key to transforming the development from a pure resort to a thriving community. The WATG design introduces the heart of the city - hospitals, schools, office buildings and SMEs are among the developments that will shape a year-round municipal downtown at Sahl Hasheesh. Phase 2 RED SEA After the revolution the TDA withdrew land plots from many developers including ERC. The allocation of Phase III of Sahl Hasheesh was cancelled with the justification that ERC did not submit the master plan of Phase III. There were no prior notices for this withdrawal, which violates the land allocation agreement. ERC immediately submitted the master plan, which has been ready but undergoing minor fine adjustments and followed the legal steps by filing an appeal to the TDA to reverse this decision. • ERC also submitted an appeal to the Dispute Resolution Committee under the TDA. • ERC then filed a case against the TDA and the court forwarded the case to the Panel of Experts to investigate and report their opinion. ERC is optimistic of the outcome because of its strong legal position and because the government not only wants, but needs, to resolve all disputes that have crippled the real estate sector and the economy in general. 16 Investor Presentation 2012 ERC Egyptian Pesorts Company#17Sahl Hasheesh: Progress Benchmarks Phase 1 Hotel Rooms • Residential Entertainment • 5.98 million m² Fully finished: 1,632 rooms (4 projects) Due 2012/13: 904 rooms Fully finished: 1,013 villas/apartments (5 projects) • 44,000 m² retail and entertainment ready 2 x Designer Golf Courses Phases I and II of Sahl Hasheesh are currently home to 2,303 hotel rooms and suites managed by brands including Premier Le Rêve, Premier Romance, Pyramisa, and Marriott Old Palace in addition to 1,378 residential units. Over 2,240 hotel rooms and 686 residential units are expected to be completed by end of 2013. A phased master plan executed in coordination with leading local and international development partners Phase 2 6.02 million m² Planning Partners Operating Partners Developers Projects Hotel Rooms Fully finished: 671 rooms (2 projects) •⚫ Due 2012/13: 1,336 rooms Residential • Entertainment • Fully finished: 365 villas/apartments (1 project) Due 2012/13: 686 villas/apartments First phase of Sawari Marina can host 330+ yachts, 3 hotels, 1,095 residential units/villas in addition to 1 mall RTKL WATG AECOM AW CONSULTING ENGINEERS VEOLIA ENVIRONNEMENT BECHTEL Group of Companies ORASCOM DEVELOPMENT & MANAGEMENT TROPICANA HOTELS & RESORTS Traveline EGYPT BRAMISA HOTELS & CRUISES www.pyramviangypt.com SAWARI Premier Murra RED SEA Veranda SAHL HASHEESH Phase 3 28 million m² Master plan by WATG finalized and delivered to TDA • General Status . Staff housing capacity (1,000 units online) EDSA MIC-00 mobility in chain ERNST BODY CORPORATE MANAGENENT PTY LTD HEPCA CARING FOR THE RED SEA Tropitel RED SEA HOTELS EGEET TRAVCO GROUP BARON PALACE Schl Hasheesh 17 Investor Presentation 2012 ERC Egyptian Pesorts Company#18A unique value proposition for: 1. Investors & Sub-Developers. Controlled Supply Large - yet strategically released - land phases based on development and ROI protection. Land supply around Hurghada is eroding quickly, while future sites at Sahl Hasheesh are easily brought online on short timelines, allowing profit protection. Superior Infrastructure "Plug-and-Play": Infrastructure up to site limits with developers simply "plugging" in. Potable Water: Desalination plants delivering water needs with plug-in expansion capability. Water Treatment: Tertiary treatment generating drinkable water. Communications: Black fiber network delivering VOIP, Internet, and IPTV. Electricity: Substations ensure capacity secured well in advance of requirements. STP Desal. One-Stop-Shop Investors and developers deal only with ERC, while ERC takes on all bureaucratic licenses, approvals, building permits and land registration. 000 Comms. GAK RGA 18 Investor Presentation 2012 ERC Egyptian Resorts Company#19A unique value proposition for: 2. Tourists & Residents Community Management in an Upscale Resort Architectural integrity and cohesion guaranteed by strict design guidelines coupled with innovative design concepts promise an ideal physical environment. Community management controls and regulations ensure an uncommonly high level of environmental amenity and management services. Maintenance and upkeep ensure a continuously functional and clean operating and service-focused environment. Full services and amenities blend the convenience and opportunities of a year-round municipality with the climate, lifestyle and attitude of a resort destination. Sahl Hasheesh Old Town Pharaonic Gate 19 Investor Presentation 2012 ERC Egyptian Resorts Company#20ERC Business Model - The Case at Sahl Hasheesh Investment → Land Identification/ Acquisition Master Planning + Infrastructure Investment Three Revenue Streams ERC leverages strong brand partnerships, a comprehensive development model and management structures that are transferable across projects and sectors - our ambition is to build a prolific regional master developer generating long term, sustainable revenue streams through 3 channels. 1 Land Sales • Land plots to developers for the construction of hotels, residential apartments and villas, golf courses, and other leisure real estate properties • Land plot use is predetermined according to modern urban development plans 2 Strategic Real Estate Development Cash Generation Commercial Development through subsidiary Sahl Hasheesh Co. (69.4%) • Commercial retail space for rent Public concession areas Residential Developments • Residential apartments for rent • Residential apartments & villas for sale Marina Development • Marina basin and docking area • Surrounding residential and commercial real estate Utilities • Water Sewage Electricity Communications Community Services 3 Community and Utilities Management Maintenance and upkeep for public infrastructure, public areas and public buildings Security provisioning for residents, visitors and workers • Waste management (provisioning and management) • Community brand and reputation development ⚫ Future capital fund maintenance and management 20 Investor Presentation 2012 ERC Egyptian Pesorts Company#21Revenue Stream 1 Land Sales SAHL HASHEESH RED SEA, EGYPT#22Revenue Stream 1: Land Sales Transfer of Ownership Occurs Upon Project Completion and Operation to Prevent Developer and Investor Speculation Offer Acceptance • Offer received from developers/investors . Reservation payments prove offer validity • Proof of project funding may be requested Sales contract signed (includes exclusive utilities agreement) •Full down payment • Design guidelines delivered to developer The vast majority of land is scheduled for release during Phase III of the project. The completion of key strategic assets will positively impact tourist and residential demand, the operating performance of sub-developers and, ultimately, land plot prices. Review + Construction 1. Plans reviewed against design guidelines 2. Construction permit issued 3. Continuous multi- disciplinary inspections CapEx • Infrastructure coordination with developer • Infrastructure investment Infrastructure delivery (120 days prior to operation commencement) Years Area (million m²) Sellable (million m²) Remains (million m²) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Plot Sales Phase I 5.98 4.39 0.46 Projects Development Plot Sales Phase II 6.02 4.32 2.04 Projects Development 22 22 Investor Presentation 2012 ERC Egyptian Pesorts Company#23Revenue Stream 1: Land Sales Industry-Beating Model 3.1 million m² (excluding Phase III and Sawari Marina) remain in the pipeline at Sahl Hasheesh. Average sales price grew at 89% annually before the financial crisis and profit margins reached 84%. Weighted Average Sales Price/m² Achieved (USD) * 2004 WAP was low due to a one-time promotional 1 million m² Golf course sold @ USD 4.01 per m² to a strategic investor CAGR = 90% Weighted Average Cost/m² (USD) 78 42 45 2004* 2005 2006 143 2007 2008 1,327 261 Land Area Sold (000 m²) 2,039 1,317 476 18.00 Uncapitalized Infrastructure Cost 1.32 1.75 120 Cost of Land from TDA Fixed Fee on Sale of Land to TDA Gross Profit ⚫ ERC maintained long-term land bank residual value by controlling end- consumer supply by not engaging new land plot sales in 2009 and 2010. • Excessive supply will result in price competition amongst developers hurting their returns and in turn hurting ERC's land plot prices. Developer Payment Terms: Down Payment: 20% - 30% Installments: 5-8 equal semi-annual installments • Cost of Infrastructure: Blended weighted average cost for all 3 phases. • TDA Land Payments: Phase I - Fully paid Phase II - Fully paid Phase III - EGP 197.7 mn outstanding, 3 years grace + 7 years payment • Infrastructure Delivery Terms: 120 days prior to development operations commencement. 23 Investor Presentation 2012 ERC Egyptien Resorts Company#24Revenue Stream 2 Real Estate Development: Strategic Projects and Sahl Hasheesh Company SAHL HASHEESH RED SEA, EGYPT#251- Strategic Real Estate Project by SHC – "Old Town" Commercial Center - ERC's subsidiary Sahl Hasheesh Company (SHC) is developing approximately 725k m2 of commercial and residential property The Old Town and public beach Build-to-Lease Sole developer for Phases I and II downtown commercial retail and entertainment areas Type of Development Plot # Size (m²) 9A 57,528 Phase 1 - Retail and entertainment 19 68,937 Phase 2 - Retail and entertainment Total 126,465 Build-to-Sell Acquires plots at market prices for mixed-use development #Plot Size (m²) Type of Development 13 420,000 Mixed Use 60 97,554 Mixed Use 49 80,983 Mixed Use Total 598,537 25 Investor Presentation 2012 ERC Egyptian Resorts Company#26Real Estate Projects Standard Economics Commercial and residential development in Sahl Hasheesh offer highly attractive development economics Build-to-Lease With an expected payback period of just over 3 years, commercial build-to-lease projects quickly generate consistent cash flows. 2,000 143 238 Footprint designated for commercial and entertainment space • Leasing Terms: Flexible performance-based leases 115,188 m² ⚫ Lease Rates: Subject to yearly review/escalation Net Area Available for Lease 217,275 m² USD/m² Floor/Area Ratio (FAR) 1.89 Net Area Developed and Available for Lease 31,309 m² Weighted Average Construction Cost (incl. land) Weighted Average Lease Rate/Year (est.) Pay Back Period (years) $ 780 $250 3.12 600 50 55% EBITDA margin 1,113 Sales Price Land Plot Price Implied Plot Price Construction Cost Overheads EBITDA ERC/TDA Building Restrictions: 20% footprint Ground + 3 floors (sellable) Land Cost Price x 1.67 Build-to-Sell Attractive build-to-sell economics, which apply to most sub-developers, provide robust medium term returns. 26 Investor Presentation 2012 ERC Egyptian Pesorts Company#27- 2 – Strategic Real Estate Project by ERC – The Sawari Marina - SAWARI The Red Sea's premier Marina and the crown jewel of Sahl Hasheesh PRIMARY BLUFFS RESIDENTIAL ENTRY WA PRIMARY HILLSIDE RESIDENTIAL ENTRY PRIMARY SECONDARY MARINA VLAGE MARINA VILLAGE ENTRY ENTRY LAGOON PATIM PATI MARINA RED SEA MAKADY BAY • • Two 5-star and one 4-star hotels in Phase 1 around the marina basin. • 2.5 million m² exclusive community centered around a world-class yacht club and marina. Water surface area of 117,000 m² to host 330+ boats and yachts from 10-to-60 meter+ in length. 1,000+ villas and apartments in Phase 1-around the marina basin and lagoon only. . An extensive pedestrian promenade, featuring more than two kilometers of boutique shopping, fine dining, cafes, nightlife and entertainment venues. 27 Investor Presentation 2012 ERC Egyptian Pesorts Company#28- 2 – Strategic Real Estate Project by ERC – The Sawari Marina Robust Demand for Luxury Developments ERC's pre-launch sales event in late 2010 a great success: Sales of luxury villas and condominiums significantly outpaced ERC's best-case-scenario projections, underscoring the strength of demand for ERC's strategic developments at Sahl Hasheesh. - Project highlights: • Total area of phase 1: 1.5 M sqm • Number of apartments: 1,020 • Number of villas: 171 • Number of hotel land plots: 3 • • Total residential BUA: • • Construction duration: Apt. average selling price: Villas average selling price: 130,000 sqm 9 years USD 2,200/sqm USD 2,900/sqm • Apartments construction cost: USD 430/sqm 000 DINING • Villas construction cost USD 520/sqm KITCHEN 38230 SWIMMING POOL D TERRACE 18 m RECEPTION 27m 42x62 Cof SALON 24 m 45x52 FOYER 23055 O ERC and ODM will continue to drive sales: Sales of Sawari Marina properties are ongoing and will continue throughout the project's development. The project will give ERC a consistent revenue and profit stream during the development phase as well as a further recurring revenue stream as the Marina comes online. . Total revenues: USD 367 M FOWDER • Total costs: USD 115 M CARPORT • Gross profit: USD 252 M ENTRY 28 Investor Presentation 2012 ERC Egyptian Pesorts Company#29- 2 – Strategic Real Estate Project by ERC – The Sawari Marina - 29 Investor Presentation 2012 ERC Egyptian Resorts Company#303 - Strategic Real Estate Project by ERC – Jamaran Villas Jamaran SAHL HASHEESH Property News Jamaran: An exclusive enclave of sea-side villas along the coast of Sahl Hasheesh . . All Jamaran villas afford open views of the Red Sea's shimmering waters. Spans a total area of 320,000 m². RED SEA 47 two-storey villas: four designs with total floor areas from 318 to 330 m². As with all Sahl Hasheesh properties, the Jamaran villas will be built according to the highest standards of modern construction. 30 Investor Presentation 2012 ERC Egyptian Pesorts Company#313 - Strategic Real Estate Project by ERC – Jamaran Villas - Jamaran will be connected to Old Town by a boardwalk, and within Jamaran itself, a range of amenities are planned. These include a network of parks spread out amongst the villas, a private club house featuring a spa, dining area and gym, and mini golf courses. Project highlights: . Number of villas: • Total residential BUA: • • Construction duration: Villas average selling price: • Total revenues: • Total costs: • Gross profit: 47 15,000 2 years USD 366,000 USD 17 M USD 6 M USD 11 M The Contemporary design • The villas possess unique architecture style while embodying the elegance, simplicity and charm associated with Sahl Hasheesh sea-side living. The designs include several bedrooms and washrooms, spacious kitchens and living rooms, and private backyard pools and rooftop terraces with all sea-view. View from a completed villa in Jamaran • Each villa has a large private garden of 800 m2 on average, and the option of adding an infinity pool and barbeque area. 31 Investor Presentation 2012 ERC Egyptian Pesorts Company#323 - Strategic Real Estate Project by ERC – Jamaran Villas The Arabesque design The Mediterranean design View from a completed villa in Jamaran 32 Investor Presentation 2012 ERC Egyptian Pesorts Company#33Revenue Stream 3 Utilities and Community Management SAHL HASHEESH RED SEA, EGYPT#34Revenue Stream 3: Utilities and Community Management ERC's extensive infrastructure investments position it as the exclusive utilities and services provider - a model that generates sustainable cash flows. . . Water ERC invests in desalination plant and equipment Management and maintenance subcontracted for a fixed fee • Water sold to developers at market rates 1 cost recovery and 3 profit centers from recurring revenues Electricity • ERC invests in internal electricity grid • ERC licensed electricity distributor • Electricity sub-station in design phase. Once online will result in substantially higher profit margins Communications • ERC invests in equipment and black fiber network throughout entire site • Services supplied through project partners High-Speed Internet VOIP IPTV Other Services Supply of Community Services • Ernst Body Corporate • designed the community administration procedures and community rules and regulations. ERC hired a team of professionals who currently manage and administer the community and its resources. • Volume and quality-based pricing Potable: Apartments: EGP 13.20 per m³ Hotel: EGP 8.80- EGP 6..55 per m³ Irrigation: Golf and Green: EGP 5.78-5.28 per m³ Capacity: 10,000 m³ current 75,000 m³ - 2035 (est.) • Gross Margins of 50% + Guiding Economics • Allocated CAPEX of USD 21.6 mn for the substation • Capacity: 20 MW current 300 MW-2035 (est.) Gross Margins of 50%+ post sub- station • . Quad-play fiber optic cables completed in Phases I and II Tevotech selected as business partner • ERC's revenue share = 25% - 40% of revenues • Fees are based on community management model as cost recovery • 15% Management Fees starting 2014 34 Investor Presentation 2012 ERC Egyptian Pesorts Company#35AGENDA 2 3 4 Investment Highlights ERC - Egypt's Leading Master Developer Corporate History and Recent Events Sahl Hasheesh - ERC's Mega Resort Community Market Opportunity Summary 6 Appendices 5#36High stock liquidity with high growth potential... Shares Outstanding Share Price* 1,050,000,000 -EGX30 ERC EGP 0.91 140 120 Market Cap. (EGP)* 955,500,000 100 80 Average Daily Volume** 4,331,983 60 2012 40 20 Revenue EBT EBT Margin *Based on close of March 31, 2013; ** 2012 EGP 40.5 million EGP (109.4) million -264.14 % 0 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 *Data is rebased to 100 7th 18th largest company in terms of volume traded 2012 (1.07 Billion shares) largest company in terms of value traded 2012(EGP 1.3 billion) 36 Investor Presentation 2012 ERC Egyptian Resorts Company#37... backed by a solid balance sheet 509.4 Consolidated Liquid Assets and Liabilities (EGP Millions) 534.2 443.5 197.1 331.9 384.2 216.4 192.1 208.1 336.2 226.9 364.8 462.3 371.2 56.1 10.4 309.2 233.6 248.1 273.8 238.6 260.0 200.0 162.0 271.1 136.5 111.6 76.0 2006 2007 2008 2009 2010 2011 2012 Cash & TB Receivables Current L. Long Term L. 37 Investor Presentation 2012 ERC Egyptian Pesorts Company#38AGENDA 2 3 4 5 Investment Highlights ERC - Egypt's Leading Master Developer Corporate History and Recent Events Sahl Hasheesh - ERC's Mega Resort Community Market Opportunity Summary Appendices#39Tourism Sector Highly strategic for sustainable economic growth aided by positive publicity. Breakdown of Arrivals by Region of Origin | 2012 Asia Pacific North America 3.7% 4.2%. Africa_ 4.3% Middle East 17.0% Europe 70.8% Source: Ministry of Tourism . 11.5 million tourists visited Egypt in 2012 down from 14.7 million in 2010 • Reduced room rates facilitating current revival Egypt accounts for: • 25% of tourist arrivals in MENA . 33% of tourist arrivals in Africa The Egyptian Tourism Sector: • • • • The 2nd largest hard currency earner - USD 9.9 billion in 2012 Represents c. 50% of all service export receipts Employs 4 million workers, 12.6% of total workforce Contributes around 12% to GDP growth 39 Investor Presentation 2012 ERC Egyptian Pesorts Company#40Tourism in Egypt 5.2 2004 2005 9/11 2006 2007 Tourism Sector Tourist Arrivals to Egypt | Millions EGP Devaluation Sharm El Sheikh attacks 12.8 12.3 11.1 9.1 8.6 8.1 14.7 Egyptian Revolution Resilience, returning tourists and continued investment highlight sector Dahab President Morsi Elected Taba & Noweiba attacks attacks 2008 2009 2010 2011 2012 2013f 2014f 14.1 11.7 13.1 12 11.5 9.8 2015f 2016f Overnight Stays in Hotels by Tourists (millions) 105.7 98.4 90.2 86.0 87.6 87.2 82.9 73.0 • 11.5 mn tourists in 2012 vs. 14.7 mn in 2010 • USD 9.9 bn revenues in 2012 vs. USD 12.53 bn in 2010 • • USD 80 average room rate is one of the region's lowest and hence most attractive in tough economic times 240,000 hotel rooms in more than 1,000 operating hotels 220,000 new hotel rooms under construction Cairo International Airport underwent USD 350 million upgrade to serve a total of 23 million passengers per year Tourism on the Egyptian Red Sea Source: Beltone Financial, ERC Staff Research • Red Sea accounts for Approx. 50% of total tourist arrivals Hurghada area alone generates around USD 4 billion in tourism revenues annually . • • 86% average occupancy in Hurghada - the highest in Egypt Red Sea governorate has 68,000 operational hotel rooms • EGP 1.4 billion Hurghada International Airport upgrade for new runway and new terminal to handle an additional 7.5 million passengers per year 2009 2010 2011 2012 2013f 2014f 2015f 2016f 40 Investor Presentation 2012 ERC Egyptian Pesorts Company#41ERC's Vision, Mission & Strategy VISION To become a regional Master Developer of International Standard Mega Communities by designing and implementing a world class master designed, developed and controlled Community Standard, with the aim of redefining Egyptian urban planning, from every aspect of the world's best international communities and developments. MISSION To make our shareholders proud of the company's standards, reputation, operational performance and financial performance by creating memorable destinations and by being a reliable partner to our sub-developers and investors. STRATEGY To successfully implement the identified initiatives to ensure the success of our main product, the Sahl Hasheesh International Resort Community, and to be flexible during uncertainty by continuously searching for organic and inorganic growth opportunities that diversify and enhance our sustainable long-term income generating ability. The search for opportunities will consider forward integration in the real estate value chain, and investments across different real estate segments, sectors and geographies. 41 Investor Presentation 2012 ERC Egyptian Pesorts Company#42Management Team (1/2) Dr. Samir Makary, Chairman Dr. Makary replaces Mahmoud Abdallah, who stepped down from the Board in support of a national corporate governance policy that will soon prevent a chairman of a government holding company from chairing any other company. Dr. Makary has over 20 years of experience in financial analysis. With Hazem Hassan Management Consultants and other firms, he has advised many public and private institutions, including the Tourism Development Authority and the Ministry of Tourism. He is also a long-time distinguished professor of Economics at AUC and author of the first feasibility study on Sahl Hasheesh Resort Community. Mohamed Kamel, Chief Executive Officer Mr. Kamel is a former Board Member of ERC and Vice President of Corporate Development. Prior to ERC, he served in various roles with KATO Investment including Corporate Vice President for Strategy and Governance and Business Development Manager. He has an MBA from Harvard Business School and an MA in Economics from the American University in Cairo. He is an ex-consultant with Bain and Company in London. Hassan Azab, General Manager, Sahl Hasheesh Company Eng. Hassan Azab has a Bachelor of Science in the Aeronautics & Military Science. He has over 30 years of experience in the design, planning, construction and commissioning of hotels and resorts (2200 rooms in total) in Hurghada, Sharm El Sheikh, Cairo, Luxor and Aswan, in addition to five floating hotels. Abu Bakr Makhlouf, Head of Investor Relations Mr. Makhlouf is heading ERC's IR team coming from a commercial strategy background and an MBA from IESE, a world leading Business School in Spain. Prior to joining ERC he served as the Commercial Strategy Manager for CEMEX where he led the company's regional business strategy. Mr. Makhlouf has a diverse background including taking on several roles in Strategic Planning, Project Management and Commercial Sales Management as well as entrepreneurship experiences. Carlos Arenas, Director - Strategy and Business Development Carlos is a Chemical Engineer and an experienced strategy consultant coming from McKinsey & Co., a prestigious strategy and management consulting firm. Prior to completing his MBA at INSEAD in 2006, Carlos accumulated extensive experience with oil and gas multinationals Union Fenosa and British Gas. 42 42 Investor Presentation 2012 ERC Egyptian Pesorts Company#43Management Team (2/2) Darren Gibson, Vice President - Planning & Development Mr. Gibson comes to ERC with over 20 years of experience in public and private sector urban planning, including eight years as a Company Director in town planning and development consultancy practices. He has extensive experience in assessment and management of urban planning projects, including master plans and large urban land release areas, major tourism projects, commercial and residential projects and major infrastructure. He is an Honors Graduate in town planning from the University of New South Wales, Sydney, Australia and is a Certified Practicing Planner with the planning Institute of Australia. Hazem Kassem, Head of Approvals Prior to joining ERC in 2008, Mr. Kassem launched an architecture and interior design firm in Cairo that has, over a seven year span, successfully delivered more than 45 commercial and residential projects in Egypt and London. Mr. Kassem holds a Bachelors degree in Architectural Engineering and Environmental Design from the Arab Academy for Science and Technology. Mohamed Saad, Director - Community Management Mr. Saad joins ERC from Misr American Carpet Company (MAC), where he was the regional business manager (Middle East and Africa). Previously, as a general manager with El Sewedy Electrical Group, he was responsible for business development and sales of major electrical infrastructure projects, including power stations, substations, and transmission and distribution networks. Mr. Saad holds a Bachelors degree in Electrical Power and Machines Engineering from Cairo University. Nazih Seoudy, Head of Developer Services Nazih Seoudy joined ERC with over 20 years of experience at Xerox Egypt, where he held a number of positions including Director of Customer Services and National Service Manager. Prior to joining ERC, Mr. Seoudy was Director of the Customer Care Department at EMAAR Misr, before joining MAC Carpets as Director of Customer Relations Management. Mr. Seoudy holds a BSc in Electrical Engineering and Communications from Ain Shams University and is also a certified Lean Six Sigma Green Belt. Wael Abou Alam, Director - Finance & Administration Prior to joining ERC, Mr. Abou Alam was the Group Financial Controller for Gozour, Citadel Capital's food holding company, which comprises a number of leading brands such as Rashidi Al Mizan, El Masreyeen, Enjoy and Dina Farms. Prior to this position, he was the Financial Planning, Analysis & Reporting Manager for Misr American Carpet Company (MAC). Mr. Abou Alam was also employed by ExxonMobil for over 14 years, rising to become the North Africa Cluster Fuel Marketing Business Analysis & Reporting Manager. Mr. Abou Alam holds a Bachelors degree in Accounting from Cairo University and an MBA in Banking & Finance from the Maastricht School of Management. 43 Investor Presentation 2012 ERC Egyptian Pesorts Company#44Select Consolidated Financials From the Income Statement (EGP 000,000's) Revenue Gross Profit EBT Net Income 2008 2009 2010 2011 2012 347.8 25.8 14.9 28.2 40.5 324.0 12.1 (5.8) (2) (11.3) 345.9 3.9 (7.8) (3.2) (106.9) 265.8 4.7 (9.4) (7.4) (110.0) From the Balance Sheet (EGP 000,000's) 2008 2009 2010 2011 2012 Cash & Treasury Bills Receivables Short-term liabilities 371.2 309.2 273.8 200.0 162.0 540.7 443.5 331.9 384.2 336.2 233.6 248.1 238.6 260.0 271.1 Long-term liabilities 197.1 192.1 208.1 216.4 226.9 44 Investor Presentation 2012 ERC Egyptian Pesorts Company#45SAHL HASHEESH RED SEA, EGYPT القدي OLD TOWN SAHL HASHEESH SAWARI *Jamaran SAHL HASHEESH The downtown commercial area and public beach of Sahl Hasheesh. Developed by Sahl Hasheesh Co., the subsidiary of ERC The Marina of Sahl Hasheesh, under development in partnership with Orascom Development and Management In-house development of sea- front residential villas with exquisite open water views and large garden areas#46ERC Egyptian Resorts Company www.erc-egypt.com www.sahlhasheesh.com