Transcript Analyst Presentation [DRAFT]

Elbit Imaging Ltd. | Investor Presentation
November 26-28, 2007
1
Disclaimer
THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING,
INTER ALIA, OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. FORWARD-LOOKING
STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT
EXPECTATIONS OF THE COMPANY AND ITS MANAGEMENT ABOUT THE COMPANY’S BUSINESS,
PERFORMANCE, ACHIEVEMENTS, ITS RELATIONSHIP WITH ITS EMPLOYEES AND THE
CONDITION OF ITS PROPERTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
PROJECTED, EXPRESSED OR IMPLIED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT
OF VARIOUS FACTORS,
INCLUDING, BUT NOT LIMITED TO THOSE DETAILED IN THE
COMPANY’S PERIODIC FILLINGS WITH THE SECURITIES AND EXCHANGE COMISION.
ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION SPEAK ONLY AS
OF THEIR RESPECTIVE DATES, AND WE CAUTION EXISTING AND PROSPECTIVE INVESTORS
NOT TO PLACE UNDUE RELIANCE ON SUCH STATEMENTS. SUCH FORWARD-LOOKING
STATEMENTS DO NOT PURPORT TO BE PREDICTIONS OF FUTURE EVENTS OR
CIRCUMSTANCES, AND THEREFORE, THERE CAN BE NO ASSURANCE THAT ANY FORWARDLOOKING STATEMENT CONTAINED HEREIN WILL PROVE TO BE ACCURATE. WE UNDERTAKE
NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS. ALL
SUBSEQUENT WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR
PERSONS ACTING ON OUR BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE
CAUTIONARY STATEMENTS.
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Group Structure
Elbit Imaging Ltd.
100%
Medical Device &
Bio Technology
52%
28%
Real Estate
India
100%
Hotels
68%
Shopping and
Entertainment Centers
CEE
Managed by :
PLAZA CENTERS NV
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History
Acquisition of Park
Plaza Victoria
Amsterdam- cornerstone for our hotel
portfolio.
1993
Acquisition of Elbit Imaging
and reorganization of business
holdings.
Initial investment in InSightec.
Acquisition &
commencement of
Bucuresti hotel - first
hotel in Eastern Europe.
Expansion of Real
Estate portfolio into the
Indian market.
1999
2000
2006
1996
1996-2004
2004
2006
Construction of the first
shopping and
entertainment center, the
Duna Plaza in Budapest,
Hungary -indicating
penetration into the
shopping and
entertainment center
operations.
Development and
management of a
portfolio of 20
shopping and
entertainment centers.
Sale of 12 shopping
and entertainment
centers to Klepierreexpanding strategy to
allow for the sale of
constructed shopping
centers.
Initial public offering of
Plaza Centers shares on
the main board of the
LSE.
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Market background and performance
Background:
 Dual listing: NASDAQ and Tel Aviv Stock Exchange;
 Part of TA-Real Estate 15 since 2006;
 Daily traded value last 12 months US$ 5 m (TA); US$ 0.5 m (NASDAQ);
 Dividend policy: 50% of annual surpluses capped at 50% of cash flow;
 Annual stock yield: 2005: 97%; 2006: 88%; 2007 (till 18.Nov): 77%.
Adjusted share price performance Dec. 2006 through Nov. 2007
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Strategy
 Focus on Real Estate in emerging markets;
ELBIT IMAGING
 Active management of group companies via controlling stakes;
 Forming strategic partnerships to leverage strength, experience
and skills;
 Penetrating uncharted territories while relying on qualified and
experienced human capital rather than utilize local resources;
 Flexible strategy taking into consideration market conditions,
between the sale of real estate or utilization of advantageous
operational conditions;
 Evaluating opportunities to conquer new investment venues;
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Business Overview
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Plaza Centers N.V
8
Plaza Centers N.V - Segment Overview
 Over 12-year track record of developing shopping &
entertainment centers in CEE - Plaza Centers has been active in the
“Leading
emerging
markets
developer
of shopping
and
entertainment
centers”
region since 1996 and was the first to develop western-style shopping
centers in Hungary;
 Plaza Centers owns 25 development assets as well as 3 office
buildings. It controls a solid and constantly evolving pipeline
in both CEE and India - the Group has the strong ability to identify new
growth opportunities, constantly targeting attractive returns in fast growing
emerging markets which is evidenced by recent portfolio additions;
 Highly skilled management team - extensive local and business
knowledge with a proven ability to source strategic development sites and
design projects that meet the demands of the local market. Many
management team members have been employed by us for many years;
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Plaza Centers N.V - Segment Overview
 Extensive network - strong relationships with both leading
international retailers and property investors as demonstrated by the
proven ability to pre-sell projects (before or during the construction) with
no less than 80% occupancy rates;
“longstanding
CEE track
record,
expanding
portfolio”
 Strong brand name - Plaza Centers has become a widely recognised
brand name for successful property development in CEE which is
beneficial at all stages of project execution (e.g. following portfolio sales
to Klépierre, Dawnay Day and aAim, the purchasers continue to
franchise the “Plaza Centers” trade name);
 Successful project development management - all projects to
date have been finalized on schedule and within budget;
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Plaza Centers N.V - Segment Overview
 Since its foundation, Plaza Centers sold 26 assets with a gross value of
€1.1 b;
“Listed on
the Main
Board of the
London
Stock
Exchange
since 2006”
 On November 1, 2006, Plaza Centers raised US$ 330 m through its IPO
and began trading on the Main Board of the London Stock Exchange
(representing a value of US$ 1 b);
 Since IPO Plaza Centers acquired 13 development sites and opened 4 fully
rented-out shopping and entertainment centers;
 Plaza Centers currently owns 25 projects under development, is negotiating
the acquisition of seven others and is analyzing development possibilities
in seven new cities. As at June 30, 2007, the market value on completion of
the projects owned as of that date was €2.8 b*;
* Source : King Sturge Valuation
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Portfolio Composition by Value and Country
Market value on
completion (€m) (1)
Value as per King Sturge
valuation reports as at 30
June 2007
Shopping and entertainment center developments
Market value of the land
and project (€m) (1)
Value as per King Sturge
valuation reports as at 30
June 2007
Total
GLA
(m^2)
1 154
534
446 500
Dream Island (value of Plaza’s 30% stake)
462
81
347 000 (GBA)
Casa Radio (value of Plaza’s 75% stake)
647
164
360 000 (GBA)
Indian mixed use projects (value of Plaza’s 50% stake)
207
40
527 000 (GBA)
Other projects and developments(2)
289
87
232 800
Total
2,759
(1)
(2)
906
1,913,300
Excludes Iasi, Slatina, Budapest (Uj Udvar), Prague (Roztoky) Belgrade and Bucharest
(Palazzo Ducale) which were not valued since they were acquired after 30 June 2007
Other properties are: Arena Plaza Extension, Helios, David House and Roztoky
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Under Development Projects By Location
No. of
projects
6
5
4
3
2
1
0
Romania
Czech
Republic
Hungary
Poland
India
Latvia
Serbia
Greece
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Arena Plaza - Hungary
Arena
Plaza,
Budapest
Overview:

Arena Plaza is one of the largest shopping and entertainment centers
in CEE, with GLA of approximately 66,000m²;

The site is prominently located in the heart of Budapest on the
Kerepesi Street in one of the most densely populated residential
districts in Budapest, adjacent to one of the major roads into Budapest
and close to the Keleti railway station (one of Budapest’s main
international train stations with the highest footfall);

Arena Plaza also includes the first IMAX cinema auditorium in
Budapest and in Hungary;

Pre-sold: to aAIM on € 380-400 m ;

Tenants: international hypermarket operator (Tesco) (c. 10,500m2),
Cinema City with IMAX 3D theatre and 22 other screens, Peek &
Cloppenburg, Zara, Hervis (sporting clothing & equipment), Electro
World, Hennes & Mauritz, C&A;

Project status: recently opened; 100% pre-let;

Opening date: November 15 ,2007;
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Dream Island (Obuda) - Hungary
Overview:
 320,000 m² plot on the southern end of the Obuda Island on the Danube
River in central Budapest;
 Plaza intends to develop the plot into a 350,000 m² business and leisure
resort including 8 to 10 4 and 5 star hotels, four apartment hotels, a
convention center, a large scale American style casino, a 3,500 seat opera
house, a 1,500 seat theatre, a marina (with an anchorage for 300 vessels),
a shopping and entertainment center, a Roman cultural museum and
parking facilities for approximately 5,500 vehicles;
Obuda,
Budapest
 The Group has a 50% shareholding in the SPV that has a 60% interest in
the consortium. The remaining members of the consortium are CP Holdings
Ltd., a member of the Group of companies controlled by Sir Bernard
Schreier (approximately 30% direct interest), MKB Bank (approximately
30% indirect interest) and a company controlled by the managing director of
the consortium (approximately 10% direct interest);
 The Group will provide project management services and retain leading
international operators for the hotels, the casino, the convention hall and the
cultural center;
 Debt funding for the project will be arranged by MKB Bank;
 Project status: Modified Town Planning Scheme (KSZT) received following
a referendum amongst the residents of the local district. Initial excavation
works commenced;
15
Casa Radio - Romania
Overview:
 Plaza Centers owns 75% of the Company which will develop the
Casa Radio project in central Bucharest (in partnership with the
Romanian state and another third party)
 Casa Radio is located on the border of Sector 1 and Sector 6 in the
city of Bucharest, which comprises a large area of the city center as
well as a high proportion of residential apartments
Casa Radio,
Bucharest
 The property comprises a brownfield site covering an approximate
area of 101,497 m²
 The proposed scheme will comprise refurbishment of the existing
building as well as the development of additional space annexed to
the building and on adjoining land
 The scheme will include a shopping & entertainment center of
approximately 120,000 m², with a hypermarket of approximately
17,000 m² , a hotel of 32,140 m² (320 rooms), an apartment hotel of
11,800 m², a convention center of 7,200 m², 122,400 m² of offices and
35,190 m² of residential areas
 Project status: Demolition works and initial construction
commenced, approaching final concept design. The center is
scheduled to open in 2011-2012
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Hotels
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Hotels - Segment Overview
Tapping into
the growing
“affordable
luxury”
market by
offering a
high quality
products at
attractive
prices.
 Over 14-year track record of constructing and managing
hotels in Western European cities - the company has been
active in the region since 1993 and in 2000 expanded its
activities into Eastern Europe;
 The company’s portfolio consists of 2,348 rooms, comprised
of seven operational hotels (1,824 rooms) and two additional
hotels currently under construction which are expected to
accommodate 524 rooms;
 Rating and location - Most hotels have been awarded 4 star
rating and are located adjacent to major transportation
facilities;
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Hotels - Segment Overview
Tapping into
the growing
“affordable
luxury”
market by
offering a
high quality
products at
attractive
prices.
 Strong brand name - The company has become widely
recognized in Western Europe with the “Park Plaza” brand name,
which holds exclusive franchise rights through a territorial license
agreement with Carlson, a leading US travel and hospitality
company. In Eastern European cities the company intends to
collaborate with the “Radisson” brand name;
 Successful hotel management - almost all hotels demonstrate
above average occupancy rate while maintaining competitive
room market rates;
 Active management of group companies via controlling
stakes - the company holds between 50% - 100% in each hotel;
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Hotels - History
 1993
Park Plaza Victoria Amsterdam - 1st property identified Landmark hotel
in Amsterdam;
 1995
Park Plaza Utrecht - acquisition of 2nd property in the Netherlands;
 1997
Park Plaza Shaw London - 1st hotel in London - construction
commences;
 1997
Park Plaza Astrid Antwerp - commencement of operations;
 1999
The Ballet Academy Building, Budapest- acquisition of monumental
building with a view to convert same into the hotel;
 2000
The Bucuresti hotel - acquisition of 1st hotel in Eastern Europe;
 2001-2005
Construction of 3 additional hotels in London: Park Plaza Victoria
London, Park Plaza Sherlock Holmes and Park Plaza RiverBank;
 2005
Park Plaza Shaw London - realization and sale of hotel;
 2006
Park Plaza Victoria Extension - acquisition of a landmark building ;
 2007
The Ballet Academy Building, Budapest-Realization and sale of building;
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Hotels Portfolio
Operating Hotel
Location
No of rooms
Controlling Stake
Park Plaza Victoria, Amsterdam
Amsterdam, The Netherlands
305
50%
Park Plaza Utrecht, Utrecht
Utrecht , The Netherlands
120
50%
Park Plaza Astrid, Antwerp
Antwerp, Belgium
229
100%
Park Plaza Sherlock Holmes, London
London, UK
119
50%
Park Plaza Victoria, London
London, UK
299
50%
Park Plaza Riverbank*, London
London, UK
460
50%
Centerville Hotel Apartments
Bucharest, Romania
292
73%
Total Operating Hotels
1,824
* Including 66 apartment hotel suits.
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Under Construction Hotel
Location
No of rooms
Controlling Stake
Radisson Bucuresti*
Bucharest, Romania
424
73%
Park Plaza Victoria
Extension (Monument)**
Amsterdam,
The Netherlands
100
50%
Total Under Construction
Total
524
2,348
*Expected opening date -2008
**Expected opening date - 2010.
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Real Estate India
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India - Segment Overview
“We believe
the wealth of
experience
and expertise
which we
have
accumulated
in other
countries
enables us to
excel in
India”
 Duplicating know-how - Duplicating know-how and expertise
(engineering, marketing, managerial) from CEE to India;
 Strategic local partnerships - cooperation with solid strategic
partners, being key players in the local real-estate business, to
leverage development possibilities by collaboration therewith;
 Strong financial stability - utilizing the company's high liquidity
and financial resources and cooperating with financially stable
partners;
 Highly skilled management team - Relocating key personal to
India;
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India - Segment Overview
“We believe
the wealth of
experience
and expertise
which we
have
accumulated
in other
countries
enables us to
excel in
India”
 Pre sale financing - Initiating Mega residential projects while
emphasizing unit pre sale as financing mechanism;
 Shopping and entertainment centers business plan development and construction by Plaza Centers of 20-30 projects
using ongoing and strong connections with international tenants
and end-customers;
 Penetrating into additional real estate venues including offices,
hotels, infrastructures and others;
 strategic tie up for development of Pan-India world class
standard hospital chain;
25
India - Cochin
Overview:

Location: Island of Cochin ,Kerala, India

High-end residential apartment buildings, office space,
shopping & entertainment center, hotel complex and a
marina;

Our share: 50%;

Total build up area of approximately 800,000 m²;

Total project cost US$ 404 m (100% share);
Cochin
26
India - Bangalore
Overview:

Location: Bangalore, Karnataka, India;

High class residential neighborhood with amenities such as
a golf course, club houses, swimming pools, tennis courts,
office complexes serviced apartments facilities, luxury 5 star
hotel, a hospital and a major retail facility;

Our share: 50%;

Total build up area exceeds 2 m m²;

Anticipated future revenues: US$ 4 b (100% share);

Expected total cost: US$ 1.9 b (100% share).
Bangalore
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Medical Device &
Bio Technology
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InSightec - Segment Overview
“Our vision
is to replace
invasive
procedures
and provide
therapeutic
alternatives
to millions of
patients with
serious
diseases
around the
globe”.

Founded in 1999;

Fully diluted holding of ~ 52%.

Our investment partners are:
–
GE Equity (20%)
–
MTA (8%)

Employs 150 workers (directly) and 50 contract workers;

US$ 100 million have been invested in R&D to date;

All investment amount has been recorded as R&D expense in the P&L during the
years;

ExAblate® 2000 is a system that combines Magnetic Resonance Imaging and
Focused Ultrasound to non-invasively treat tumors inside the body without the need
for incisions (in use in 55 medical centers);

FDA highlighted the system as one of the 14 medically significant products it
approved during 2005;

InSightec is testing possible application of its ExAblate® 2000 to treat other forms of
tumors including cancer of the breast, bones, liver and brain tumors;
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Significant developments in the last 12 months
SHOPPING &
ENTERTAINMENT
CENTERS
HOTELS
REAL ESTATE INDIA
BIO TECHNOLOGY
PLAZA
CENTERS
HOTELS
•
Since IPO Plaza Centers acquired 13 development sites and opened 3 fully
rented-out shopping and entertainment centers;
•
Sold 3 shopping and entertainment centers to Klépierre at a gross asset
value of € 129 m (c. 7.3% gross yield).;
•
Pre-sale of 1shopping and entertainment center to aAIM for approx. €400 m
(c. 5.9% gross yield);
•
Sale of the “Ballet Institute Building” in Budapest, Hungary reflecting an
asset value of € 30 M;
•
Acquisition of Park Plaza Victoria extension., an office building located next
to our Park Plaza Victoria Amsterdam hotel;
•
Acquisition of 3 real estate mixed-used projects with anticipated total
construction cost (including land of US$ 430 m-100% share );
•
Initiating Mega residential projects with anticipated total construction cost
(including land of US$ 2.4 b- 100% share);
•
The Exablate 2000 system received the CE mark certification for pain
palliation of bone metastases;
INDIA
INSIGHTEC
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Targets for 2007-2010
SHOPPING &
ENTERTAINMENT
CENTERS
PLAZA
CENTERS
HOTELS
HOTELS
REAL ESTATE INDIA
INDIA
BIO TECHNOLOGY
INSIGHTEC
•
Complete business plan of 60-70 shopping and entertainment centers in CEE;
•
Annual target of 6-8 new development projects;
•
Target returns of no less than 40%-60% on invested equity;
•
Construction and Development of Plaza Centers mega-projects (Dream Island,
Casa Radio);
•
Expansion of our hotel portfolio by combining same into our mixed-used
portfolio (in India and CEE);
•
I.P.O of, or alternative transaction in the hotel segment;
•
•
•
Construction of 2m-3m m² of residential properties;
Development of 20 commercial centers (through Plaza Centers);
Developing a division of hotels, offices & other real estate operation;
•
Completion of 4-5 cancer applications for FDA approval;
•
I.P.O of InSightec in the NASDAQ;
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