#1ERC Egyptian Resorts Company Investor Presentation 3Q 2015#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 Strong shareholder base and experienced management team Unique value proposition for sub-developers and residents 4 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#5ERC: 9M 2015 Developments & Overview Surge in Revenues ERC reported an almost 19-fold y-o-y increase in net revenues to EGP 316.2 million for 9M2015. The improvement in 9M results can be attributed mainly to year-on-year increases of 513% in activities revenues (EGP 297.4 million) and 19% in service revenues (EGP 36.2 million). Record Cash Collections The ongoing recovery of the hospitality sector and economy in general drove significant increases in cash collections from sub-developers and retail buyers, which stood at EGP 154.2 million for 9M 2015 compared to EGP 39.8 million for 9M 2014. Receipts from community management and services also rose by 26% in 9M 2015 to reach EGP 26.4 million. Cash Position The company's balance sheet remained liquid at the close of the third quarter, with cash of EGP 148.1 million. Sawari Marina Land ERC received the green light from the TDA (pending EEAA approvals) to proceed with the development of Phase 1 of the Sawari Marina project. The exclusive community will center around a world-class yacht club and marina with room for more than 330 boats and yachts. Pre-sales are expected to commence in 1H 2016. TAWAYA ERC subsidiary SHC's joint venture with Palm Hills Developments was launched in April 2015 and unit reservations have so far reached 20% of total available properties. The project shell is fully constructed, and internal finishing is set to be completed within a 12-18 month period. Jamaran The company's Jamaran development sold out towards the end of 2014 and has set the company on course to realize c. EGP 100 mn in revenues over the next three years EGX 30 ERC is now back on The Egyptian Exchange's most famous and followed index, the EGX 30, awarding the company greater exposure to local, regional, and international investors, on both the retail and institutional levels. 5 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#6AGENDA 3 4 LO 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 2#7ERC - 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 3 Invest in comprehensive state-of-the-art infrastructure Water | Sewage Treatment | Electricity | Communications | Road Networks 4 Market individual pre-designated plots to sub-developers and investors 5 Develop prime residential and commercial real estate: Old Town, Sawari and Jamaran 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 Manage the community and supply of utilities Implement design guidelines Develop prime residential and commercial real estate Market individual pre- designated plots Invest in comprehensive state-of-the-art infrastructure Create the master plan Acquire broad acre land holdings 7 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#8ERC 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 three channels. 1 2 Land Sales 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 • 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 administration • Community brand and reputation development ⚫ Future capital fund maintenance and management 8 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#9AGENDA 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#10Shareholder 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 Nominal Share Value (EGP) 1.00 Others 40.48% KATO Investment ! 11.96% Shareholding Structure First Arabian Company 10.00% Rowad Tourism 9.05% Fiscal Year December 31 ERC Tax Structure 10-year tax exemption ended 2007 Subsidiaries Sahl Hasheesh Co. (SHC) - 78.43% SHC Tax Structure 10-year tax exemption ending 2017 Employees 500 4.50% Orascom Development Holding Misr for Life Insurance I 9.00% Al Ahly Capital Holding I I 8.05% I 6.96% Misr Insurance 10 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#11ERC Corporate History 2015 2014 Design Construction 2013 • 2011 Marketing Community Management 2010 2009 • 2008 2007 • 2006 2015 onwards ERC to prepare for work on the Sawari Marina project after having received the TDA's approval to redefine the boundaries of Sahl Hasheesh's Phase II in May 2015 Complete internal finishing of Tawaya project within 12-18 months, SHC's joint project with Palm Hills Developments Concentrate efforts on land sales to sub-developers with demand for plots at all-time high 2014 Company ramps up marketing efforts, looking to capture larger market share as tourism recovers ERC contracted 100% of Jamaran for EGP 100 million to be realized over the following three years 2010-2013 New management augments existing internal structure, taking company to next level in its lifecycle -key support functions included in HR plan Detailed development of community services and utilities reticulation model Third regional five-star hotel begins operations The Old Town receives its first tenant Focus on completing key strategic assets - ERC signs with leading global developer Orascom Development Holding (ODH) to develop the Sawari Marina at Sahl Hasheesh. ODH also takes equity stake in ERC Jamaran villas project launched on sea front land plot First hospital/wellness facility signed on 2007-2009 First regional four-star hotel begins operations 2005 • 2004 • Construction Marketing Sahl Hasheesh community management vision takes shape • 2003 Phase III master planning process begins • 2002 • 2001 2000 • 1999 • 1998 • Design 1997 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 Infrastructure work begins with Bechtel as project manager Aggressive marketing to counter tourism industry crash Appreciation of overall financial climate leads to practical and market-leading sales terms and development schedules 1998 First plot sold for USD 37/m² 1996-1997 • Incorporation, concept development and master planning for Phases I and II by RTKL Land acquired for first project - "Sahl Hasheesh" - at an average price of USD 1.32/m² 11 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company 1996 1995 1995 •#12Emerging from the Crisis: Another Opportunity Dislocations after the global financial crisis and the 2011 uprising have left Sahl Hasheesh with the opportunity to emerge as the destination of choice for investors. Comfortable Cash Reserves EGP 148 million ERC can spend on critical infrastructure projects for the coming years. Prime Land Bank ERC owns over 2.7 million m² of prime locations (1.6 million m² available for sale 1.1 million m² Sawari Marina Project) on the Red Sea coast. Average sale prices grew at a CAGR of 90% before the global financial crisis. Proprietary Strategic Projects on the Rise ERC is developing several key projects that increase Sahl attractiveness and Hasheesh's encourage STRATEGY. Supporting investment to boost the destination Smart, targeted, destination marketing is positioning 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' was the key to the turn around of 2015. 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 around 2.7 million m² available for development over the next six to eight years as further proven by developing a number of proprietary projects. widespread development: • • • Jamaran: Sea-front villas Tawaya: Sea-front apartments Sawari: Marina project (apartments, villas, hotels & commercial units). 12 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#130 20 20 Jan-11 40 60 60 200 180 160 140 120 100 80 Apr-11 Jul-11 Oct-11 - January 2011 November 2015 (rebased to 100) Delayed recovery relative to peers suggests strong rebound triggered by acceleration of sales activity and Phase III land plot issue resolution Jan-12 Apr-12 Jul-12 V Oct-12 EGX30 EGTS MNHD TMGH ODHN PHDC OCDI Jan-13 Apr-13 Jul-13 Oct-13 www Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 13 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company www#14AGENDA 2 3 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 4#15A rare and established prime diving and seaside destination Phase 3 Phase 2 Phase 1 Gaza Strip Alexandria Jordan Bovet Egypt Cairo Luxor Hurghada Sahl Hasheesh On program to become the no. 1 destination for seaside hospitality, residential and entertainment developers 15 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#16A master-planned project roughly two-thirds the size of Manhattan Sahl Hasheesh is a unique, purpose-built Red Sea destination 18 km south of Hurghada International Airport and approximately 470 km 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 seaside destination and includes a 12.5-km shoreline. LOCATION + SIZE 18 km south of Hurghada Int'l Airport 22 km south of Hurghada city center 470 km from Cairo 32 mn m²/10,000 acres / 4,100 hectares Approx. two-thirds the size of Manhattan DIMENSIONS + SHORELINE Length Range: From 7.0 to 8.0 km Depth Range: From 4.5 to 6.8 km Bay Length: 12.5 km (7.8 miles) Gorgeous sandy beach, 9 km swimmable Overlooks renowned dive site at Hasheesh Island UNIQUE CHARACTERISTICS An all seaview resort Land elevations range from 0 m above sea level at the front of the resort to 120 m at the back-almost 40 stories high Year-round resort with moderate to hot weather and calm waters 16 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#17A WATG Master Plan Phase III pending Tourism Development Authority (TDA) approval Phase 3 Phase Phase 2 RED SEA Phase III shapes and brings online phased districts totaling 20 million square meters, and is the key to transforming the development from a pure resort to a thriving resort city. 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. . . • • • • • After the 2011 uprising, 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 violated the land allocation agreement. ERC immediately submitted the master plan, which had been ready but was 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 about the outcome because of its strong legal position and because the government not only wants but also needs to resolve all disputes that have crippled the real estate and tourism sectors and the economy in general. 17 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#18Sahl Hasheesh: Progress Benchmarks Phase 1 Hotel Rooms Residential • 6 million m² Fully finished: 1,632 rooms (four projects) Rooms under construction: 4,440 Fully finished : 1,094 villas/apartments (five projects) Phases I and II of Sahl Hasheesh are currently home to more than 3,000 hotel rooms and suites managed by brands including Premier Le Rêve, Premier Romance, Pyramisa and Old Palace, in addition to 1,500 residential units. Five of our hotels are top 10 picks on Trip Advisor. 6,300 hotel rooms and 670 residential units are under construction. • Entertainment 44,000m² retail and entertainment ready Two designer golf courses Phase 2 6 million m² A phased master plan executed in coordination with leading local and international development partners Planning Partners Operating Partners Developers VEOLIA ORASCOM RTKL DEVELOPMENT & MANAGEMENT ENVIRONNEMENT • Hotel Rooms Fully finished: 1,560 rooms (three projects) • Rooms under construction: 1,860 • Residential • Fully finished: 460 villas/apartments (1 project) Villas/apartments under construction : 670 Entertainment First phase of Sawari Marina to host 330+ yachts, three hotels and 1,095 residential units/villas, in addition to a commercial area WATG AECOM AAW CONATING ENGINEERS Phase 3 20 million m² General Status • Master plan by WATG finalized and delivered to TDA Staff housing capacity (1,000 units online) BECHTEL Projects PALM HILLS SAWARI TAWAYA SENSATIONALLY YOURS DEVELOPMENTS TROPICANA HOTELS & RESORTS Jamaran SAHL HASHEESH e TIME SUITES AZZURRA Group of Companies EDSA MIC-CO mobility in chain ERNST BODY CORPORATE MANAGENENT PTY LTD HEPCA Traveline EGYPT Pyramisa Premier RED SEA LOTELS Murra RED SEA Veranda SAHL HASHEESH CARING FOR THE RED SEA BARON PALACE TRAVCO GROUP Sahl Hasheesh 18 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#19A unique value proposition for ... 1. Investors & Sub-Developers. Controlled Supply Large - yet strategically released - land phases deployed 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. KO 064 19 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#20and 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 20 20 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#21ERC Business Model - The Case at Sahl Hasheesh 1 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 three 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. (78.44%) • 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 21 Investor Presentation 1Q 2015 ERC Egyptian Resorts Compeny#22Revenue Stream 1 Land Sales SAHL HASHEESH RED SEA, EGYPT#23Revenue Stream 1: Land Sales Transfer of Ownership Occurs Upon Project Completion and Operation to Prevent Developer and Investor Speculation Offer Acceptance Review + Construction CapEx ⚫ 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 1. Plans reviewed against design guidelines 2. Construction permit issued 3. Continuous multi- disciplinary inspections • Infrastructure coordination with developer ⚫ Infrastructure investment • Infrastructure delivery (120 days prior to operation commencement) 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. Years Area (million m²) Sold (million m²) ERC Future Projects (million m²) Available for Sale (million m²) 2015 2016 2017 2018 2019 2020 2021 2022 Plot Sales Phase I 6 5.5 0 0.5 Projects Development Plot Sales Phase II 6 4.9 1.1 (Sawari Marina) 1.1 Projects Development 23 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#24Revenue Stream 1: Land Sales • Industry-Beating Model 2.7 million m² (excluding Phase III) remain in the pipeline at Sahl Hasheesh. Average sales price grew at a CAGR of 90% before the global 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 at USD 4.01 per m² to a strategic investor In 2013 and 2014, we sold 67,000 m² to the same strategic investor with favorable prices CAGR 26% Weighted Average Cost/m² (USD) 42 42 78 45 2004* 2005 2006 2007 1,327 261 2,039 151 143 2008 40 116 109 2012 2013 2014 2015 4 20 101 641 Land Area Sold (000 m²) 1,317 476 ⚫ 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 among developers . hurting their returns and in turn hurting ERC's land plot prices. Developer Payment Terms: Down Payment: 20% - 30% Installments: 5 - 12 equal semi-annual installments 22.95 Uncapitalized Infrastructure Cost 90 00 1.32 1.75 Cost of Land from TDA Fixed Fee on Sale of Land to TDA Gross Profit • Cost of Infrastructure: Blended weighted average cost for all 3 phases. • TDA Land Payments: Phase - Fully paid Phase II Fully paid Phase III - EGP 273* mn outstanding (Long Term Liability), three years grace + seven years payment • Infrastructure Delivery Terms: 120 days prior to development operations commencement. *As of 30/9/2015 24 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#25Revenue Stream 2 Real Estate Development: Strategic Projects and Sahl Hasheesh Company SAHL HASHEESH RED SEA, EGYPT#26Under Development 1 SHC Land Bank and Strategic Developments | Overview ERC's subsidiary Sahl Hasheesh Company (SHC) is developing approximately 700,000 m² of commercial and residential property Sole developer for Phases I and II downtown mixed-use areas Plot # Size (m²) Type of Development 9A 33,994 Mixed Use Currently developed BUA over Plot 9A Lease 10,897 Sell 14,262 Retail/Commercial Residential w/PHD For Future Development Strategic plots acquired at market prices for mixed-use development Plot # Size (m²) Type of Development Festival World 487,660 Mixed Use 5.7 80,983 Mixed Use 60 97,554 Mixed Use Total 666,197 26 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#271 SHC Strategic Developments | Tawaya with Palm Hills Developments TAWAYA SAHL HASHEESH SENSATIONALLY YOURS • Project Highlights A partnership between SHC and Palm Hills Developments to build an exclusive waterfront residential project in the Old Town of Sahl Hasheesh. • With this strategic alliance, ERC is targeting the build-up of a local community of residential owners. • Project Brief o 147 exclusive seafront apartments, spread over seven buildings o Unit sizes range between 60-294 m² o Sellable BUA of 14,262 m² o Delivery in 12 to 18 months o Sales window opened in April 2015 o Expected project duration of 2 years ERC 27 Investor Presentation 3Q 2015 Egyptian Resorts Company#282 ERC Strategic Developments | Sawari Marina with Orascom DH PRIMARY SECONDARY MARINA VIAGE MARINA VILLAGE ENTRY ENTRY SAWARI LAGOON PATIM MARINA ML3 • • 2.5 mn m² exclusive community centered around a world-class yacht club and marina Water across 117,000 m² to host 330+ boats and yachts from 10-60+ m in length • Two 5-star and one 4-star hotels in Phase 1 around the marina basin • . 1,000+ villas and apartments in Phase 1-around the marina basin and lagoon only An extensive pedestrian promenade, featuring more than 2 km of boutique shopping, fine dining, cafes, nightlife and entertainment venues Project Highlights • Total area of Phase 1: . Number of apartments: 1.1 mn m² 1,020 Number of villas: 171 . Number of hotel land plots: 3 . Total residential BUA: Construction duration: 130,000 m² 9 years (for phases 1 &2) 28 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#292 ERC Strategic Developments | Jamaran Jamaran SAHL HASHEESH • An exclusive enclave of sea-side villas along the coast of Sahl Hasheesh SOLD OUT Property News • Four designs to choose from, with each possessing a unique architecture style while embodying the elegance, simplicity and charm associated with Sahl Hasheesh seaside living Designs include several bedrooms and washrooms, spacious kitchens and living rooms and private backyard pools and rooftop terraces, all with sea view Each villa has a large private garden and the option of adding an infinity pool and barbeque area ERC has attracted a real estate developer to acquire and develop an area designated for sea-side apartments while adhering to the simple, elegant design guidelines that characterize Jamaran • Total Land Area • Total No. of Villas . Total Residential BUA . Villa Land Area (average) Villa BUA Construction duration Villa selling price (average) Total contracted revenues: 320,000 m² 51 of 181 15,000 m² 1,000 m² 318-330 m² 3 years USD 335,000 USD 13 mn 29 29 The Contemporary design Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#30Revenue Stream 3 Community and Utilities Management SAHL HASHEESH RED SEA, EGYPT#31Revenue Stream 3: Community and Utilities 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 is the 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 15.00 per m³ • Hotels: EGP 10.00 per m³ Irrigation: 3 • Golf and Green: EGP 6.25 per m³ • Capacity: 14,000 m³ current 75,000 m³ - 2035 (est.) Gross Margins of 50%+ • • Guiding Economics Budgeted CAPEX of EGP 100 million for a new 40 MW substation Capacity: 20 MW - current 300 MW 2035 (est.) ⚫ Gross Margins TBA post sub-station • Quad-play fiber optic cables completed in Phases I and II • Tevotech & LinkdotNet selected as business partners • ERC's revenue share = 15%-40% of revenues • Fees are based on community management model as cost recovery • 15% management fees starting 2016 31 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#32AGENDA 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#33High stock liquidity with high growth potential ... 52-Week Performance Chart (rebased to 100) Shares Outstanding Share Price* 1,050,000,000 EGP 0.94 140 Market Cap.* EGP 987,000,000 120 Average Daily Volume** 14.3 million 100 9M 2015 80 EGP 316.2 million 60 Revenue EBT EGP 196.4 million 40 20 Net Income Cash & Receivables *As of September 30th, 2015. ** Source: Naeem Brokerage EGP 172.3 million 0 EGP 680.9 million Nov-14 3rd Dec-14 Jan-15 Feb-15 Mar-15 - EGX30 EGTS Aug-15 Sep-15 Nov-15 Moriss Meris maniss kiss merits sants coss Movies Apr-15 May-15 Jun-15 12th largest company in terms of average daily volume traded - 2014 (14.3 million shares) largest company in terms of average daily value traded - 2014 (EGP 23.4 million) 33 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#34I backed by a solid balance sheet 443.5 Consolidated Liquid Assets and Liabilities (EGP millions) 331.9 384.2 216.4 226.9 236.3 192.1 208.1 336.2 328.9 342.0 283.3 260.6 532.8 348.8 309.2 248.1 273.8 238.6 260 271.1 252.4 271.6 200.0 162.0 148.1 108.9 98.1 2009 2010 2011 2012 2013 2014 9M15 Cash & TB Total Receivables Current L. Long Term L. • • Collections & Cash Receipts Collections from sub-developers and retail buyers reached EGP 154.2 million in 9M 2015 - up from EGP 39.8 million in 9M 2014 Cash receipts from facility management and services rose by 26% y-o-y from EGP 20.9 million in 9M 2014 to 26.4 EGP million in 9M 2015 34 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#35AGENDA 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#36Tourism in Egypt 9/11 Tourism Sector EGP devaluation Sharm El-Sheikh attacks Resilience, returning tourists and continued investment boost sector Tourist Arrivals to Egypt | Millions Breakdown of Arrivals by Region of Origin | Year 2014 11.1 8.6 9.1 8.1 6 5.2 12.8 12.3 14.7 Jan. 25 uprising Germany lifts travel warning June 30 protests 11.5 9.9 9.8 9.5 Taba and Nuweiba attacks Dahab attacks Mohamed Morsi elected president Taba attack 2011 2012 2013 2014 2015f 2016f Tourist numbers up 4.9% y-o-y in 8M2015 to 6.6 mn. • Tourism revenues reached USD 4.6 bn in 8M2015 reflecting a year-on-year increase of 2.2% Average number of nights spent grew 18.3% y-o-y in July 2015 to stand at around 9.5 nights Total number of nights spent had increased in the seven-month period (January to July) 2015 to reach approximately 53.6 mn compared to 50.1 mn during the same period in 2014 Americans, 2.5% others, 4.4% Arabs, 16.4% 14.1 13.1 Tourism on the Egyptian Red Sea Source: Ministry of Tourism, Tourism Investors Association, GAAFI, Egyptian Union for Tourism Chambers, CAPMAS Europe, 76.7% • • • Capacity in the Red Sea governorate stands at 69,000 hotel rooms, 31% of Egypt's total hotel capacity of 225,000 Occupancy rate in Sahl Hasheesh remains higher than norms in Egypt, standing at c. 75% in 10M 2015. Turnaround was aided by increased government spending on infrastructure projects such as the USD 335 million expansion of Hurghada International Airport, as well as investments made by forward-looking companies such as ERC to build-up capacity and infrastructure in the area 36 Investor Presentation 3Q 2015 ERC Egyptian Resorts Company#37ERC'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 as well as investments across different real estate segments, sectors and geographies. 37 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#38Management Team (1/2) 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. Azab has a Bachelor of Science in Aeronautics & Military Science. He has over 30 years of experience in the design, planning, construction and commissioning of hotels and resorts (2,200 rooms in total) in Hurghada, Sharm El Sheikh, Cairo, Luxor and Aswan, in addition to five floating hotels. Nasser Aboulela, Vice President - Planning & Development Mr. Aboulela joined ERC with over 25 years of experience in hands-on management of master planning and real estate development in the United States, Japan, Russia and the United Arab Emirates. He held executive positions with major corporations including Universal Studios, Dubai World, and Skolkovo Foundation. Mr. Aboulela's involvement in high profile projects includes Universal Studios Florida Islands of Adventure, Universal Studios Japan, Honolulu International Airport in Hawaii and Zagorodny Kvartal, Russia. Mr. Aboulela holds a Bachelor's Degree in Architecture from Alexandria University and a Master's degree from the University of California, Los Angeles. Mohamed Saad, General Manager - Site Operations Mr. Saad joined 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 Bachelor's degree in Electrical Power and Machines Engineering from Cairo University. Abu Bakr Makhlouf, Director - Commercial Mr. Makhlouf heads ERC's commercial activities with an extensive background in commercial strategy 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. Hazem Kassem, Director - Approvals & Compliance, Planning and Development 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 Bachelor's degree in Architectural Engineering and Environmental Design from the Arab Academy for Science and Technology. Osama Shendy, Director - Human Resources Mr. Shendy joined ERC with 19 years' experience, bringing his extensive expertise in strategic planning, restructuring, organizational development, human resources management and quality management systems. Prior to joining ERC, Mr. Shendy acted as lead consultant for numerous organizations such as Arabian Cement Company, Kobusch Packaging Egypt, Al Rajhi Investments and Contact Group, to name a few, in addition to being Director of HR and Organizational Development at El Sewedy, Mobica and MAC Carpets. Mr. Shendy was also a National Business Planning Consultant for FAO (UN) in addition to having been a member of the Board of Advisors for the National Award for Excellence for both Government & Business Sectors. Mr. Shendy holds an MBA in Corporate Strategy and Economic Policy from the Maastricht School of Management, and is a certified assessor for business excellence as well as a Certified Management Consultant from the Institute of Management Consultancy, the UK. 38 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#39Management Team (2/2) Sherif Omar, Director - Planning and Design Mr. Omar joined ERC in 2003 as Chief Mechanical Engineer, supervising a number of projects including the construction of a sewage treatment plant and a water pump station. He became Head of Infrastructure, Planning and Design in 2010. Prior to joining ERC, Mr. Omar was a Technical Office Project Engineer, and later a Project Manager at the Arab Engineering Company. He holds a BSc in Mechanical Engineering from Cairo University. Ahmed Fahmy, Head of Information and Communication Technology Mr. Fahmy has more than eight years of experience in the Information and Communication Technology (ICT) field. He is responsible for preparing ICT related strategic and operational plans, including designing and managing the ICT infrastructure, networks and several ICT solutions, as well as supervising the implementation of the ICT security strategy. Prior to Joining ERC, Mr. Fahmy held several IT positions in real estate and IT-solution companies. Mr. Fahmy holds a Bachelor's degree in Telecommunication and Electronic Engineering. Laila Karim, Head of Marketing Ms. Karim joined ERC as Marketing Manager with her core job responsibilities including analyzing market trends, leading all areas of content generation and production across all media platforms, and creating and leading a marketing team that will develop and execute new marketing concepts, business models, communication channels, and establish new partnerships to help position business as an innovator and market leader. Prior to joining ERC, Ms. Karim held a number of key positions in companies such as AAPIC and BioGeometry Canada. Ms. Karim holds a Bachelor's degree in Communications Studies with a specialization in Public Relations from California State University, as well as an Interior Design Diploma from American River College in Sacramento, and a M.A. degree in Interior Design from Florence Design Academy. Mounir Sedki, Head of Strategy and Business Development Prior to joining ERC in 2011, Mr. Sedki spent four years of his career with Booz & Company, the world's renowned strategy and management consulting firm. While at Booz, Mr. Sedki worked on a vast array of projects in sectors ranging from real estate to public and transportation in the MENA region, whereby he conducted extensive industry research and business assessment as well as several transformation strategies. Mr. Sedki holds a Bachelor's degree with honors in Mechanical Engineering from the Arab Academy for Science and Technology. Nazih Seoudy, Head of Developer Services Mr. 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. Sameh Hashad, Head of Community Engineering Mr. Hashad has over 20 years of experience in the field of construction engineering and large-scale project development. He joined ERC in 1998 as an Assistant Construction Manager and has since worked on various projects, most notably Arrival Piazza as well as eight commercial shopping centers around Sahl Hasheesh on Egypt's Red Sea coast. Prior to joining ERC, Mr. Hashad worked for a number of reputable Egyptian and Saudi developers and was involved in the planning and execution of major projects, including renovation and construction work on King Abdulaziz University. Mr. Hashad holds a Bachelor's degree in Civil Engineering as well as a diploma in Soil Mechanics and Foundations from Cairo University. Sayed Amer, Head of Accounting Mr. Amer has more than 18 years of experience in the field of accounting and auditing. Prior to joining ERC, Mr. Amer spent 14 years of his career as a senior audit manager at KPMG Hazem Hassan, Egypt. He was responsible for the diligent review of audit documents and ensuring compliance with the firm's methodology and applicable auditing standards. Mr. Amer is a member of the Egyptian Society for Accountants and Auditors (ESAA). He holds a Bachelor's degree in Commerce from Cairo University with a major in Accounting. 39 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#40Select Consolidated Financials From the Income Statement (EGP mn) Revenue Gross Profit EBT Net Income 2009 2010 2011 2012 2013 2014 9M 2015 25.8 14.9 28.2 40.5 28.9 51.3 316.2 12.1 (5.8) (2) (11.3) (23.1) (42.4) 218 3.9 (7.8) (3.2) (106.9) (43.1) (40.5) 196.4 4.7 (9.4) (7.4) (110.0) (47.7) (41.4) 172.3 From the Balance Sheet (EGP mn) Cash & Treasury Bills Receivables Short-term liabilities Long-term liabilities 2009 2010 2011 2012 2013 2014 9M 2015 309.2 273.8 200.0 162.0 109 98.1 148.1 443.5 331.9 384.2 336.2 328.9 342.0 532.8 248.1 238.6 260.0 271.1 236.3 271.6 348.8 192.1 208.1 216.4 226.9 252.4 260.6 283.3 40 Investor Presentation 3Q 2015 ERC Egyptian Resorts Compeny#41SAWARI SAHL HASHEESH RED SEA, EGYPT TAWAYA SAHL HASHEESH SENSATIONALLY YOURS Jamaran SAHL HASHEESH لقد OLD TOWN SAHL HASHEESH The Marina of Sahl Hasheesh, under development in partnership with Orascom Development and Management An exclusive waterfront residential project in the Old Town of Sahl Hasheesh, co- developed with PHD In-house development of sea- front residential villas with exquisite open water views and large garden areas The downtown commercial area and public beach of Sahl Hasheesh. Developed by Sahl Hasheesh Co., the subsidiary of ERC#42ERC Egyptian Resorts Company www.erc-egypt.com www.sahlhasheesh.com