Transcript Slide 1

EQUITY STORY
“SOLID GROUNDS FOR SOLID GROWTH”
DFM Roadshow, London, 21-22 May 2008
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
SHUAA CAPITAL – AT THE VANGUARD OF REGIONAL
INTEGRATION
1979-1998
Investment company
focused on principal
investments
1999-2005
Since 2005
Transformation into fully
integrated financial services
institution
Maintain leadership position in
UAE and expand regionally
REGIONAL PRESENCE
Dubai
Abu Dhabi
Riyadh Cairo Doha Beirut
DIFC
Istanbul
Corporate
SUBSIDIARIES & ASSOCIATES
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
GROUP SUPPORT FUNCTIONS
RESEARCH
Page
2
SOLID GROWTH – CONSOLIDATED FINANCIALS
FINANCIAL
HIGHLIGHTS
FY 2006/07 vs FY 2007/08
in AED Millions
83.3%
53.0%
710.8
Operating Income
AED710.8 m
+83%
thereof
Fee & Commission
Income
AED429.7 m
+60%
Net Profit
AED400.5 m
+53%
AED0.782
+57%
AED5.65
139%
339
+46%
Cost/Income Ratio
30.05%
+37%
ROAE
17.00%
-4%
Gearing
36.15%
-35%
Debt/Equity Ratio
57.56%
-55%
AED4.0 b
+71%
EPS (undiluted)
BVPS (undiluted)
400.5
387.7
FY 2007/08 Change y-o-y
Headcount
261.8
Operating income
Net profit
Market Capitalization
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Page
3
SOLID GROWTH MOMENTUM CONTINUES
OPERATING INCOME
in AED Millions
NET PROFIT
in AED Millions
CAGR
52%
CAGR
52%
710.8
400.5
362.4
477.2
261.8
223.8
387.7
319.8
131.9
FY2003/04 FY2004/05 FY2005/06 FY 2006/07 FY 2007/08
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
72.4
FY2003/04 FY2004/05 FY2005/06 FY 2006/07 FY 2007/08
Page
4
SOLID GROWTH - CONSOLIDATED FINANCIALS
OPERATING INCOME BY TYPE
in AED Millions
42.0
Income from
associates
Fees and
commissions
income
429.7
112.5
169.7
126.3
368.5
144.9
107.7
89.7
73.8
17.9
1Q06/07 2Q06/07 3Q06/07 4Q06/07 1Q07/08 2Q08/08 3Q07/08 4Q07/08
Income from
investments
108.1
201.8
139.8
52.7
27.8
170.9
66.0
137.6
44.3
15.8
-13.5
FY2005/06
OPERATING INCOME TREND
in AED Million
FY2006/07
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
NET PROFIT TREND
in AED Million
Income from
investment
securities
107.2
103.1
74.5
49.5
40.4
FY2007/08
213.0
Net Interest
Income
54.0
58.9
2.0
1Q06/07 2Q06/07 3Q06/07 4Q06/07 1Q07/08 2Q08/08 3Q07/08 4Q07/08
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5
DIVERSIFIED INCOME PORTFOLIO
SEGMENT REPORTING
Operating Income
FY 2007/08 in AED millions
SEGMENT REPORTING
Operating Income
FY 2007/08
Investment
Banking
13.9%
Asset
Managemen
t
23.5%
Principal
Investments
Brokerage
18.4%
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
+1002.8%
47.5
+183.8%
167.2
+636.0%
Investment
Banking
98.7
+196.3%
Brokerage
130.6
+94.8%
Finance
53.9
+62.8%
Corporate
55.1
-72.5%
Private Equity
Asset
Management
Finance
7.6%
Corporate
7.8%
Private
Equity
6.7%
157.6
Principal
Investments
22.2%
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6
SHAREHOLDER STRUCTURE
SHAREHOLDER STRUCTURE
As of 31 March 2008
FOREIGN SHAREHOLDERS
North
America
16.6%
Europe
20.8%
Other
13.0%
Arab
3.8%
Foreigners
22.5%
GCC
21.1%
UK
49.6%
Following the DBG convertible
bond conversion on 31 October
UAE
Nationals
52.6%
2008, 125million additional share
will be available to foreign
shareholders.
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Page
7
STOCK DATA
SHARE PRICE DEVELOPMENT
FACTS & FIGURES
Year end share price:
Increase y-o-y
Current Share Price:
52 week range:
Avg. daily trading value:
million
Avg. Daily trading vol.:
Shares outstanding:
Par Value:
Foreign ownership limit:
AED7.25
71%
AED8.14
AED4.17– 8.82
AED7,5
Total Trading Value 9M 07/08:
Total Shares traded 9M 07/08:
AED1.9 billion
300 million
Bloomberg:
Reuters:
Dubai Financial Market
SHUAA.DB
SHUA.DU
SHUU.DU
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
1.2 million shares
550,000,000
AED1
49%
Page
8
BUSINESS LINE HIGHLIGHTS
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
PRINCIPAL INVESTMENTS
COMPETITIVE EDGE
Evaluating principal investments since 1979
“Endowment” approach
Specialist investment team
Partnerships with regional product
specialists provide proprietary deal flow
VALUE DRIVERS
Indo-Gulf Corridor
Market inefficiencies
Integration of GCC in global financial
markets
Interlink between GCC, China and India
Direct and co-investment opportunities
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
STRUCTURE
Principal Investments
(ca. $860 million)
Heritage
Investments*
ca. $167 million
49%
Porta
Egypt
49%
Al Kout
Industrial
23%
Taghleef
Industries
Strategic
Investments
ca. $130 million
20%
47%
2.5%
Portfolio
Investments
ca. $560 million
SC Multi
Strategy
Portfolio
ca.$450 million
India Special
Situations /
India Arbitrage
ca. $80 million
Fixed Income
ca. $36
million
*Principal Investments is a sole LP – SHUAA Partners manages the investments
Page
10
PRINCIPAL INVESTMENTS
HIGHLIGHTS
Superior return of 31% on Multi Strategy
Portfolio as of 31 March 2008
Profitable standalone proprietary business
Taghleef Industries now global number one
in BOPP packaging films – US$500m
business
OPERATING INCOME
in AED Millions
157.6
1002
%
14.3
FY 2006/07
FY 2007/08
NET PROFIT
in AED Millions
PIPELINE/TARGET
2 Product launches within 1H2007/08 that
will allow co-investment in our portfolio
Target IRR 15%
146.2
3289
%
4.3
FY 2006/07
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
FY 2007/08
Page
11
INVESTMENT BANKING
SELECTED TRANSACTIONS
UAE, GCC & GLOBAL IPO LEAGUE TABLE
Rank
Ran
Market US$ Rank Market
Market
k
Share Total UAE Share Globa Share
GCC
l
Lead Manager
Samba Financial
Group
1
31%
3,654
SHUAA Capital
2
24%
2,80
4
Merrill Lynch
3
10%
1,240
Deutsche Bank
4
10%
1,240
100% 18 0.6%
1
EMEA IPO
LEAGUE
Millennium
Finance
5 TABLE
10% 1,240
Volume in US$ Billions
10.29
8.89 8.27 8.27
7.76
6.38
4.52
Rank
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
1
2
3
4
5
6
7
3.65 3.64 3.08 3.06
8
9
10
2.80 2.44
11 12 13
1.99 1.78
14
Page
15
12
INVESTMENT BANKING
COMPETITIVE EDGE
High quality IPOs with strong aftermarket
Unparalleled insight into investor appetite
and behavior
Successful execution breeds IPO pipeline
Strong relationships & market knowledge
Total SHUAA-managed IPOs represent 13%
of total market cap on DFM and 51 % of
total trading volume (as of 31 March 2008)
OPERATING INCOME
in AED Millions
33.3
FY 2007/08
NET PROFIT
in AED Millions
FY 2006/07
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
196.3
%
FY 2006/07
14.5
98.7
72.1
395.3
%
FY 2007/08
Page
13
SHUAA ASSET MANAGEMENT
COMPETITIVE EDGE
Longest regional track record (since 2001)
6 GATEWAY funds span Arab and GCC
markets
1 Fixed Income Fund
13 discretionary portfolios
Conventional & Shariah compliant products
Best Islamic MENA Equity Fund 2007
Headcount: 35 professionals
ARAB GATEWAY FUND
FY 2007/08
Arab Gateway Fund
MSCI Arabian Markets…
160%
150%
140%
130%
120%
110%
100%
$550
Millions
VALUE DRIVERS
Assets under
Management
$500
$515
$450
Management + Performance Fees
International Asset Managers seeking
access to regional markets
Strong fundamentals
Macroeconomic trends
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
$400
$350
$300
$243
$250
$200
Page
14
SHUAA ASSET MANAGEMENT
AUM GROWTH
in AED Millions
2246.6
4914.3
OPERATING INCOME
in AED Millions
118.8%
167.2
636.0%
22.7
As of 31 March 2007
As of 31 March 2008
ASSETS UNDER MANAGEMENT
by Client Type
Individual /
HNWI
33.0%
Fund of
Funds
31.5%
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
FY 2006/07
FY 2007/08
NET PROFIT
in AED Millions
130.6
Institutional
24.3%
Banks /
Financial
Institutions
11.2%
1297.5
%
9.3
FY 2006/07
FY 2007/08
Page
15
SHUAA PARTNERS
COMPETITIVE EDGE
Excellent network for deal sourcing
(since1979)
Clear focus on GCC
Longest track record
Proprietary deal flow
UAE passport enables access to GCC
opportunities
SIGNATURE INVESTMENTS
VALUE DRIVERS
Regional Factors - GCC integration
Economic reform & liberalization
Proprietary deal flow & deal environment
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
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16
SHUAA PARTNERS
HIGHLIGHTS
SHUAA Partners Fund I (US$200mn)
– Closed
– 2 exits: Petrofac and Damas
– IRR of 47% on exited investments
Frontier Opportunities Fund I (US$100mn)
– Closed
– 1 Investment
• Syriatel
OPERATING INCOME
In AED Millions
47.5
183.8%
16.7
FY 2006/07
FY 2007/08
NET PROFIT
in AED Millions
36.3
SHUAA Hospitality Fund I (US$200mn)
– US$50 million invested by SHUAA and
Rotana
– First Closing scheduled for 1H 2008/09
504%
6.0
FY 2006/07
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
FY 2007/08
Page
17
SHUAA SECURITIES
COMPETITIVE EDGE
Through Orion deal SHUAA Securities is
largest equities brokerage in GCC and Arab
world
SHUAA Securities offers access to 12 GCC
and Arab markets through one single
platform
TRADING VALUE FY 2007/08
in US$ Million
UNITED ARAB…
4948.7
3852.6
SAUDI ARABIA
KUWAIT
QATAR
EGYPT
OMAN
OTHER
521.7
250.1
249.1
130.3
245.0
TRADING VALUE FY 2006/07
in US$ Million
VALUE DRIVERS
Integration of regional brokers
Market recovery & evolving “equity culture”
Regional expansion (KSA & Qatar)
Strong international investor appetite
574.7
SAUDI ARABIA
KUWAIT
QATAR
EGYPT
MOROCCO
OTHER
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
1042.8
UNITED ARAB EMIRATES
226.1
155.9
153.2
112.5
218.3
Page
18
SHUAA SECURITIES
HIGHLIGHTS
SHUAA Securities maintains leading
position in UAE institutional sales
Market recovery results in growth
Over 600 HNWI and institutional clients
65% professional investors
OPERATING INCOME
in AED Millions
67.0
130.6
94.8%
FY 2006/07
TRADING VALUE
in US$ Millions
10197.5
311%
FY 2007/08
NET PROFIT
in AED Millions
38.2
86.2
125.5%
2483.5
FY 2006/07
2006/07
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
FY 2007/08
2007/08
Page
19
GULF FINANCE
HIGHLIGHTS
Asset based lending on the rise due to
construction and tourism boom
Gulf Finance Corporation has produced 10
years of continuous growth
Clear focus on United Arab Emirates
OPERATING INCOME
in AED Millions
33.1
53.9
62.8%
FY 2006/07
VALUE DRIVERS
GULF FINANCE has the same UAE license
as Amlak and Tamweel
Recently increased its capital to US$ 55
million
Growing population
Favourable demographics
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
FY 2007/08
NET PROFIT
in AED Millions
18.5
FY 2006/07
33.9
82.9%
FY 2007/08
Page
20
CORPORATE
HIGHLIGHTS
SHUAA Capital Saudi Arabia commenced
operations and has had a strong start
Acquisition of 20% stake in Orion Holding
and controlling stakes in 5 regional brokers
Significant investments in attracting,
retaining and training Human Capital
Holding corporate investments for best
possible exit scenario
Joint Venture with Orascom and Rotana
through private equity division
SHUAA Asset Management applied for
DIFC license
Continued to invest in strengthening
financial brand and value
OPERATING INCOME
in AED Millions
200.5
73%
FY 2006/07
55.1
FY 2007/08
NET LOSS
in AED Millions
18.5
FY 2006/07
666%
FY 2007/08
-104.8
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Page
21
SHUAA RESEARCH
COMPETITIVE EDGE
Historical financial information on over 800
listed companies across MENA region
Publications
– Prime equity coverage on 73% of
market capitalization in the UAE and
45% in KSA
– GCC daily equities briefs
– Quarterly earnings updates
– Regular market reports
– Specific industry and thematic reports
– Monthly Stock Pick Monitor
– Yearly “UAE and KSA Vision” outlook
report
Proprietary Index Family with 12 regional
and sector indices
Macroeconomic Research
Data Provider for Dow Jones Indexes
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Daily Equities Brief
Company Reports
Comprehensive and In-depth Research Coverage on Regional Companies
Page
22
HUMAN RESOURCES
SENIOR MANAGEMENT CONSISTENCY
Chief Executive Officer
Iyad Duwaji
CAGR
37%
20
Deputy CEO
Kerim Mitri
12
SHUAA Securities
Mohammed Ali Yasin
339
10
SHUAA Asset Management
Haissam Arabi
8
Investment Banking
Salam Saadeh
8
Research
Walid Shihabi
233
Avg.
8.3 Years
147
7
Investment Banking
Makram Kubeisy
6
93
70
Principal Investments
George Shehadeh
Finance
Steve Williams
NUMBER OF EMPLOYEES
74
3
0.5
FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06 FY 2006/07 FY 2007/08
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Page
23
STRATEGIC PRIORITIES
Further promote GCC as an asset class and destination of capital
Obtain, maintain or retain leadership position in each business line
Mirror UAE success story in KSA, Qatar and other Arab Markets
Focus relentlessly on high-growth, high-margin business
Enhance client relationships with value-enhancing solutions, onground presence and suite of best-in-class products and services
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Page
24
SHORT-TERM OUTLOOK
Corporate will continue to fuel the machine through additional support
services, organic growth, further acquisitions and strategic alliances
Principal Investments will enhance its “endowment” approach to investing
and will allow third-parties investors to buy into portfolio investments
Assets under Management will rise due to inflow of capital from international
institutional investors – with increasing emphasis on Asian investors
Brokerage will continue to benefit from increased trading activity from both
local and international investors – both retail and institutional
Investment Banking pipeline scheduled to deliver in second half of 2008
Private Equity will mark first closing of new Hospitality Fund I in first half of
2008
Finance will grow its UAE footprint and product portfolio
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Page
25
FINANCIAL HIGHLIGHTS
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
RECORD ASSETS UNDER MANAGEMENT
POSITIONING PAYING OFF
Highest ever clients assets under
management/custody is a result of:
– Targeted expansion strategy
– Product and services offering
– Extremely well positioned to benefit from
macroeconomic trends, market
developments and industry outlook
– Credibility and trust
– Financial brand value
– High calibre talent
– Consistency in what we do
TOTAL CLIENT AUMs
in AED billions
14.23
6.12
4.07
1.01
FY 2003/04
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
6.55
FY 2004/05
FY 2005/06
FY 2006/07
FY 2007/08
Page
27
DIVERSIFIED INCOME PORTFOLIO AND BALANCE
SHEET
OPERATING INCOME
Asset
FY 2007/08
Investment
Banking
13.9%
Management
23.5%
Private
Equity
6.7%
Principal
Investments
22.2%
Corporate
7.8%
8.6%
Finance
7.6%
Brokerage
17.3%
Private Equity
1%
Asset
Management
3%
Investment
Banking
3%
Brokerage
9%
Finance
12%
Corporate
39%
LIABILITIES
by Division
Finance
8.5%
Corporate
62%
Corporate
51.7%
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Investments
33%
Brokerage
18.4%
OPERATING INCOME
Investment
FY 2006/07 Asset
Banking
Management
5.9%
Private
Equity
4.3%
Principal
Investments
3.7%
NET ASSETS
by Division Principal
Principal
Investments
1%
Investment
Banking
3%
Brokerage
13%
Finance
21%
Page
28
FINANCIAL HIGHLIGHTS
ROAE
TOTAL EQUITY
in AED Billions
3.70
43.09%
30.03%
.45
FY2003/04
1.56
1.54
FY2005/06
FY 2006/07
17.87%
17.74% 17.00%
.64
FY2004/05
FY 2007/08
FY 2003/04
FY 2004/05
21.83%
5.85
3.48
FY 2007/08
9.67%
9.01%
FY 2006/07
FY 2007/08
20.05%
9.85%
2.35
FY2003/04
FY 2006/07
ROAA
TOTAL ASSETS
in AED Billions
.80
FY 2005/06
1.27
FY2004/05
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
FY2005/06
FY 2006/07
FY 2007/08
FY 2003/04
FY 2004/05
FY 2005/06
Page
29
FINANCIAL HIGHLIGHTS
COST INCOME RATIO
NET PROFIT MARGIN
30.05%
81.21%
84.42%
75.37%
22.60%
14.35%
FY 2003/04
69.24%
21.90%
FY 2004/05
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
65.59%
12.92%
FY 2005/06
FY 2006/07
FY 2007/08
FY 2003/04
FY 2004/05
FY 2005/06
FY 2006/07
FY 2007/08
Page
30
BALANCE SHEET
BOOK VALUE
in AED Billion
BVPS UNDILUTED (pre bond
conversion)
in AED
3.69
3.28
1.59
FY 2003/04
1.56
.48
FY 2003/04
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
FY 2005/06
1.55
FY 2006/07
FY 2004/05
FY 2005/06
BVPS DILUTED (post bond
conversion)
in AED
3.28
2.14
1.59
.67
FY 2004/05
2.14
FY 2007/08
FY 2003/04
FY 2004/05
FY 2005/06
6.72
2.81
FY 2006/07
FY 2007/08
4.62
2.81
FY 2006/07
FY 2007/08
Page
31
CONTACT INFORMATION
OLIVER SCHUTZMANN
Head of Investor Relations
SHUAA CAPITAL psc
The Gate, West Wing, Level 2
Dubai International Financial Center
P.O. Box 31045, Dubai - UAE
T
+971 4 3651 872
F
+971 4 3303 550
M
+971 505442078
[email protected]
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE
Page
32
THANK YOU
INVESTMENT BANKING
ASSET AND PORTFOLIO MANAGEMENT
REGIONAL BROKERAGE AND ADVISORY
PRIVATE EQUITY
FINANCE