Investor Presentation: Orascom Construction. 16 February 2015

Investor Presentation: Orascom Construction 16 February 2015 Disclaimer– Important Information This document has been prepared by Orascom Constructi...
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Investor Presentation: Orascom Construction 16 February 2015

Disclaimer– Important Information This document has been prepared by Orascom Construction Limited (the “Company”) and is the responsibility of the Company and comprises the written materials for a presentation concerning the Demerger and the proposed Admission of the Company's shares (the "Shares") to the Official List of Securities maintained by the Dubai Financial Services Authority (the "DFSA") and to trading on NASDAQ Dubai ("Admission"). This presentation and the information contained herein are strictly confidential and are being shown to you solely for your information. The information may not be reproduced, distributed to any other person or published, in whole or in part, for any purpose. This document does not constitute or form part of any offer to sell or issue or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of OCI N.V. (the "Parent") or the Company, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. The information and opinions contained in this document are provided as at the date of the presentation and are subject to change. None of the Company, the Parent or the Sponsor undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. Any purchase of or subscription for ordinary shares in the Company in the public trading market after Admission should be made solely on the basis of the information contained in the final Prospectus issued by the Company in connection with the proposed Admission . Such Prospectus will include a description of risk factors in relation to an investment in the Company. To the extent available, the industry, market and competitive position data contained in this presentation come from official or third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company reasonably believes that each of these publications, studies and surveys has been prepared by a reputable source, EFG-Hermes UAE Limited (the "Sponsor"), the Parent and the Company or any of their respective directors, officers, employees, agents, affiliates or advisors have not independently verified the data contained therein. In addition, certain of the industry, market and competitive position data contained in this presentation come from the Parent’s and the Company’s own internal research and estimates based on the knowledge and experience of the Parent’s and the Company’s management in the markets in which it operates. While the Company and the Parent reasonably believe that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation. The information contained in this document has not been independently verified and does not purport to be comprehensive or to contain all the information that a prospective purchaser of securities of the Company may desire or require in deciding whether or not to offer to purchase such securities. The Company, Sponsor and their respective subsidiary undertakings or affiliates, or their respective directors, officers, employees, advisers or agents do not accept any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, fullness, accuracy or completeness of the information in this presentation (or whether any information has been omitted from the presentation) or any other information relating to the Parent, the Company, their subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. This document has been prepared by the Company solely in connection with the Admission. Neither this document nor any part or copy of it may be taken or transmitted into the United States (US) or distributed, directly or indirectly, in the US, as that term is defined in the US Securities Act of 1933, as amended (the “US Securities Act”). Neither this document nor any part or copy of it may be taken or transmitted into Australia (other than to persons in Australia to whom an offer of securities may be made without a disclosure document in accordance with Chapter 6D of the Corporations Act 2001 (Cth)), Canada or Japan or to any resident of Japan, or distributed directly or indirectly in Australia (other than persons in Australia to whom an offer of securities may be made without a disclosure document in accordance with Chapter 6D of the Corporations Act 2001 (Cth)), Canada or Japan or to any resident of Japan. Any failure to comply with this restriction may constitute a violation of US, Australian, Canadian or Japanese securities laws. This document does not constitute an offer of securities to the public in the United Arab Emirates, the Dubai International Financial Centre, Egypt, the United Kingdom, South Africa or in any other jurisdiction. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Persons into whose possession this document comes should observe all relevant restrictions. In the Republic of South Africa, this document is distributed for information purposes only on a confidential basis to a limited number of persons who are market professionals or institutional investors. The shares of the Company have not been, and will not be, registered under the US Securities Act and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the US Securities Act or unless registered under the US Securities Act and in compliance with the relevant state securities laws. There will be no public offering of the shares in the United States. This presentation is only directed at and being communicated to the limited number of invitees who: (A) if in the European Economic Area, are persons who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (which means EU Directive 2003/71/EC and any amendments thereto, including the amending directive, Directive 2010/73/EU to the extent implemented in the relevant member state and any relevant implementing measure in each relevant member state) (“Qualified Investors”); and (B) if in the United Kingdom are persons (i) having professional experience in matters relating to investments so as to qualify them as “investment professionals” under Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); and (ii) falling within Article 49(2)(a) to (d) of the Order; and/or (C) are other persons to whom it may otherwise lawfully be communicated under the laws and regulations of each applicable jurisdiction without giving rise to any approval, regulatory or filing requirement on the part of the Sponsor, the Company or the Parent (all such persons referred to in (A), (B) and (C) together being “Relevant Persons”). This document must not be acted or relied on by persons who are not Relevant Persons. Any investment activity to which this document relates is available only to Relevant Persons and may be engaged in only with Relevant Persons. Nothing in this presentation constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. If you have received this presentation and you are not a Relevant Person you must return it immediately to the Company. Any purchase of shares in the public trading market after the proposed Admission should be made solely on the basis of the information contained in the final Prospectus to be issued by the Company in connection with the Admission. No reliance may or should be placed by any other person for any purposes whatsoever. The information in this document and any other material discussed at the presentation is subject to change up until any the publication of the final Prospectus to be issued by the Company in connection with the Admission. The information in this document may include forward-looking statements, which are based on current expectations and projections about future events. These forward-looking statements, as well as those included in any other material discussed at the presentation, are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. No representation or warranty is made that any forward-looking statement will come to pass. No one undertakes to publicly update or revise any such forward-looking statement. The Sponsor is acting for the Company and the Parent in connection with the Admission and no one else and will not be responsible to anyone other than the Company or the Parent for providing the protections afforded to their respective clients or for providing advice in relation to the Admission or any transaction or arrangement referred to in this presentation. By attending the presentation to which this document relates and/or by accepting this document you will be taken to have represented, warranted and undertaken that: (i) you are a Relevant Person (as defined above); and (ii) you have read and agree to comply with the contents of this notice. Orascom Construction Limited was incorporated on 18 January 2015 as a DIFC entity. The Company has not produced / prepared audited consolidated financial statements to date. The reviewed Combined Special Purpose Financial Statements for the period ending 30 September 2014, and the audited Combined Special Purpose Financial Statements for 31 December 2013 and 2012 resulted in net losses for the Group. For more explanation on the reasons of the losses, please refer to pages 46 and 47 of the presentation.


Transaction Structure Summary Structural Overview

Commentary Demerger of Orascom Construction (OC) from OCI N.V.

Sawiris Family

Free Float 46%


USD 1.4 billion repayment of capital to OCI N.V. shareholders

OCI N.V. remains listed on Euronext Amsterdam and does not retain a shareholding in OC post demerger

Same shareholding for both companies at demerger record date


Dual Listing Structure for OC Fertilizers & Chemicals

² Orascom Construction

BESIX (50%)


Primary listing on NASDAQ Dubai where all OCI N.V. shareholders will receive shares in OC

Secondary listing of ordinary shares on the Egyptian Exchange (EGX)

Shares fungible between the two markets subject to respective procedures of relevant regulatory bodies


Egyptian Capital Raise Sawiris Family

Free Float 46%


Sawiris Family 54%³


Up to 15% of share capital of Orascom Construction

Proceeds to be used for general corporate purposes including debt settlement


Key Milestone Dates¹


OCI N.V. Fertilizers & Chemicals

Free Float

Orascom Construction

BESIX (50%)



¹ Dates are indicative and could be subject to change ² Also includes construction related and infrastructure investments ³Pre-Egyptian Capital increase; shareholding percentages are approximate

16 Feb: demerger press release issued

19-26 Feb: institutional bookbuilding process; pathfinder prospectus published on 19 Feb

1-4 Mar: retail subscription period

6 Mar: demerger record date

9 Mar: OC to trade on NASDAQ Dubai and OCI N.V. trades ex-OC

9-11 Mar: trading on the EGX commences


Demerger Highlights  The spin-off creates two separately-listed pure play companies offering distinct investment propositions: – Orascom Construction: global engineering and construction group – OCI N.V.: global producer of natural gas-based fertilizers and chemicals  Timing coincides with record 45% growth in backlog as at 30 September 2014 as compared to 31 December 2013

 Attracts clear market valuations

Streamline Shareholder Base

 Provides global emerging markets and regional investors with new exposure to MENA infrastructure and capital investment  Strong construction base in the US provides natural hedge and an opportunity to capture US infrastructure growth  Improved visibility allows for a better understanding of OC’s prospects and impact of sector-focused events on performance


Growth Opportunities

Efficient Capital Structure

 Provides greater focus to manage own resources and pursue strategic options appropriate to OC’s markets

 Actively participate in infrastructure spending growth across the Middle East and USA  Pursue value-accretive investments and partnerships in respective markets

 OC to adopt its own capital structure, balance sheet and financing strategy which will more effectively meet its individual requirements  Improves lenders’ ability to evaluate the business, increasing balance sheet effectiveness


Investment Highlights  Global contractor with a major position in MENA and US infrastructure and industrial projects – Record backlog of US$ 5.6 billion using equity consolidation and pro forma US$ 7.7 billion including our share in BESIX & other JVs as of 30 Sept 2014 – Track record of growth and shareholder value creation – History of successfully entering new markets and incubating new businesses

 Accelerating momentum in 2014 – backlog a key driver of growth – Significant opportunities in our core markets Egypt (major projects), Saudi Arabia (social infrastructure) and USA – Provides momentum for 2015-2016 revenue and margin growth  Infrastructure investments to provide attractive and stable cash flows – Strong balance sheet allows us to effectively pursue value accretive equity investments – New coal-fired power plant initiative with International Petroleum Investment Corporation (IPIC) – Egypt’s first Public-Private Partnership (PPP) project (Orasqualia) – US subsidiaries studying similar infrastructure opportunities in USA  Strategic shareholding of 50% in BESIX Group, providing consistent annual dividend – Leading contractor with 55% of high-profile backlog located in MENA

– 2013 revenue of over €2 billion and net cash of €190 million¹ – Provides OC with exposure to specialty capabilities (e.g. high-rise and marine works) that provide access to projects like Burj Khalifa and Grand Egyptian Museum

¹ 9M 2014 backlog for BESIX and other JV’s sourced from OCI N.V. Trading Updates; BESIX figures are sourced from public BESIX filings and converted at the following rates: EUR:USD BS rate of 1.2957, 1.3190, 1.3761 for 2011, 2012, and 2013 respectively. EUR:USD IS rate of 1.4028, 1.3041, 1.3284 for 2011, 2012, and 2013 respectively.


Strong Track Record of Growth and International Expansion 1950


Founded by Onsi Sawiris in Upper Egypt – first project was the refurbishment of a school wall

Contrack formed to pursue USAID and USACE work in Egypt





OCI and BESIX management jointly acquire BESIX Group in 50/50 LBO

OCI launches 5005 Action Plan to achieve 50% of revenue outside Egypt by 2005

Achieves 50-05 Action Plan a year early

2005 2008 Significant backlog growth with major awards in Algeria, Egypt and UAE Led initiative to develop Egypt’s first private ammonia plant in 2006 and Africa’s largest fertilizer complex in 2007


2012 2014


Awarded Egypt’s first PPP project (New Cairo Wastewater Treatment Plant) in a JV with Aqualia

Formed Orascom Saudi Ltd (60% owned JV with Saudi Binladin)

KSA backlog contribution grows from 0% in 2010 to 21% in 2014

Acquires Weitz in 2012 to establish strategic foothold in USA Began work on first world scale greenfield fertilizer plant in USA in 25 years & largest new methanol plant in USA JV with IPIC to develop coal-fired power plant in Egypt

Putting the Track Record into Perspective Backlog Growth (US$ Million) 7,697



As at 30 September 2014




Well-balanced geographic backlog presence1

Revenue Growth (US$ Million)

Rest of World 5.8%


Egypt 26.5%



USA 43.1%


Saudi Arabia 20.7%



9M 2014

1999 2009


9M 2014

Algeria 3.7%

A Long and Successful Track Record of Growth and Geographic Expansion Both Organically and Through Acquisitions 1Backlog

excludes BESIX and other joint ventures accounted for under the equity method beginning 1 January 2014


Strategic Geographic and Sector Diversification

United States 43% of Backlog Egypt 27% of Backlog

 ENR Ranking: 67 on International Contractors list; 138 on Global Contractors list  Leading MENA industrial and infrastructure contractor  Established in 1950

Saudi Arabia 21% of Backlog

 ENR Ranking: 142 on Top 400 US Contractors list

 ENR Ranking: 120 on Top 400 US Contractors list

 Preferred US government contractor for the last 10 years

 Established in 1855 and is present in 12 US states

 Established in 1985 and operates in MENA

 One of the oldest commercial contractors in the US

 ENR Ranking: 69 on International Contractors list; 99 on Global Contractors list  Established in 1909 with 100+ years of infrastructure and highend commercial experience in MENA and Europe

Large geographic presence – each region with an established customer base 1

Backlog contributions as at 30 September 2014 ² Engineering and News Record rankings published August 2014 based on 2013 revenues


Recent Developments Announced on 5 Nov 2014 along with International Petroleum Investment Company (IPIC) the intention to jointly commence studies to develop, construct, and operate a 2,000-3,000 MW coal-fired power plant in Egypt

Infrastructure Investments

MoU signed on 12 November 2014 by the partners and the Egyptian government to formalize the parties’ cooperation

Orascom Construction and IPIC would aim to develop this project on a fast-track basis to help meet Egypt’s rising demand for electricity

This is a strategic step in further developing OC’s infrastructure focus in Egypt and other key regional markets

Such joint efforts with IPIC lay a solid foundation for collaboration on future projects

During Q4 2014, Orascom Construction was awarded the following significant projects: 

Additions to the backlog

Renewable Energy Program in Egypt

In December 2014, a consortium of General Electric and OC was awarded the construction of two power plants in Egypt as part of the country’s Emergency Power Generation Program ‒

Expected to be completed during Q2 and Q3 of 2015 to meet expected high demand for power during the summer months

OC’s share of the contract value is approximately US$ 642 million

OC was awarded the construction of three tunnels estimated at EGP 12 billion as part of the New Suez Canal mega-project in Port Said, which will enlarge the canal’s transit capacity and increase industrial activity in the area 1

Other OC awards total approximately US$ 330 million in USA and Egypt

Shortlisted by the Ministry of Electricity as one of the qualified developers for a new solar and wind renewable energy program in Egypt  OC constructed the first solar power plant in the Middle East in Kuraymat, Egypt as an EPC contractor


Board of Directors Chairman



Nassef Sawiris

Osama Bishai

Salman Butt


Executive Board Member

Non-Executive Board Member


CEO Orascom Construction



Independent Non-Executive

Arif Naqvi

Sami Haddad

Khaled Bichara

Azmi Mikati

Non-Executive Board Member

Non-Executive Board Member

Non-Executive Board Member

Non-Executive Board Member

Founder & CEO Abraaj Group

Former CEO/Chairman Byblos Bank

Co-CEO - Accelero Capital Chairman -

CEO M1 Group

The Board of Directors will establish three committees: Audit Committee, Remuneration Committee and Nomination Committee All to be chaired by independent non-executive directors


Management Team Osama Bishai CEO

Joined the Group in 1985 Played a key role in developing the business of the Group, particularly in the oil & gas sector and OCI N.V.’s infrastructure and industrial investments in Egypt, Algeria and USA

Dalia Khorshid

Mark Littel 

 

EVP & Group Corporate Treasurer/Finance Operations  Joined Group in 2005

CFO Joined Group in 2014

Senior Operational Management

Maged Abadir Operations Director Orascom  Joined Group in 1988

Wahid Hakki •

GM Contrack Joined Group in 1994

Leonard Martling 

GM Weitz Joined Group in 1985

Strong leadership team led by skilled professionals who have a proven track record of growing the business historically, both organically and through acquisitions, led by our CEO

– –

Clear sense of long term focus and commitment to the business Unrivalled experience in the international construction industry that has been central to our growth and strong track record

The leadership team laid the foundation and roadmap for successful development of the Company with a vision of shaping the business for expansion and growth

Depth of knowledge and experience extends beyond senior management and deep into our organization, with a comprehensive structure of experienced managers and highly skilled workforce, which is at the forefront of the industry


Commercial Strategy Strategic Market and Geographic Expansion  Expand market presence in our core markets in MENA and USA  Further strengthen activities in our key sectors in Egypt, USA, Saudi Arabia, Algeria and Iraq  Continued commitment to pursue strategic market and geographic expansion  Simultaneously selectively pursue and grow business in new markets

Pursue Value Accretive Investment Opportunities

 Leverage our investment track record to identify and pursue new investment opportunities that provide stable cash flows, scalable platforms and potential further scope for growth (co-contractor and owner of Egypt’s first PPP project)  Expand participation in infrastructure investments both as standalone brands and in consortiums in all of our core markets, including PPP and DBFM projects (currently bidding for BOT/PPP projects)  This allows Orascom Construction to pursue larger industrial and infrastructure projects as well as lock in ongoing steady returns

Establish and Leverage Strategic Partnerships and Joint Ventures  Work in partnership with industry leaders to increase success rate in obtaining new project work  Historical relationships and strategic partnerships have enabled us to participate in some of MENA's largest construction projects and maintain a strong market position among local construction companies in North Africa  Key current partnerships such as Saudi Binladin Group, IPIC, Aqualia, GE and VINCI

Operational Excellence

 Key determining factors when contracting: ‒ Continued commitment to quality, safety, environment and ethical business practices

‒ Maintain a safe and healthy workplace for all employees by implementing the highest safety standards and training programs  Set global standards by putting our expertise and experience to work for our clients, our partners and our host communities, all while respecting local sensitivities

 Consider strategic tuck-in acquisitions that enhance our core competencies and add valuable human resources to our construction team (such as Weitz)


New Awards Accelerating and Record Level Backlog Strong momentum led by $3.9 billion in new awards during 9M 2014 compared to $1.2 billion in FY 2013 5.6

4.9 4.0


– 30 Sept 2014 backlog reached record level of $5.6bn, up 39% y-o-y


– US$ 3.9 bn new awards during 9M 2014, up 6x y-o-y

3.3 2.7

Momentum accelerating since beginning of 2014


2011-2013 period was challenging, but measures are starting to pay off – Economic downturn, combined with Arab Spring in our core markets


– Significant provisions taken in 2012 and 9M 2014




2013 Backlog

Backlog by Sector - 30 Sep 14

Infrastructure 53.8%

New projects awarded in Q4 2014 include two power plants in Egypt worth approximately US$ 642 billion

9M 2014

New Awards

Backlog by Geography - 30 Sep 14 Rest of World 5.8%

Commercial 11.6%

Industrial 34.6%

9M 2013

Egypt 26.5%

Backlog by Client- 30 Sep 14

Backlog by Brand - 30 Sep 14 Weitz 8.3% Contrack 12.9%

OCI N.V. F&C 26.7% Public 50.7%

USA 43.1% Saudi Arabia 20.7% Algeria 3.7%

Private 22.6%

Orascom Construction 78.8%

Record levels of Quality Backlog Across Diversified Markets – representing 2.4 times our FY2013 Revenue


excludes BESIX and other joint ventures accounted for under the equity method; backlog excludes intercompany work; geographic segmentation based on project location


Significant potential pipeline of new awards 2015 - 2020 2014 Key Turning Point  Significant progress in core markets Egypt, Saudi Arabia and USA – Egypt: US$ 450+ million of road and airport work; cemented position as a leader in the power sector with US$ 600+ million of new power projects – Saudi Arabia: continued to build on proven track record with c. $500 million of additional infrastructure work awarded during the year

– USA: expanded footprint through the construction of one of the largest methanol plants in the US and an 89% increase in Weitz backlog y-o-y

Looking Ahead  Benefitting from post-financial crisis and post-Arab Spring resurgence in core construction markets  Backlog as key driver of significant revenue growth: – Typically provides on average 18 - 24 months of revenue visibility – Further revenue growth as ongoing projects to continue filter into our accounts in 2015 - 2016

Backlog and expertise focused on high growth markets / segments in MENA and United States with promising bidding pipeline Build on previous experience in infrastructure investments and concessions to provide steady investment income and cash flow Strong and well-established sovereign and large private client base with repeat business Significant local resources: a global work force of c.53,000; with a proven ability to mobilize these resources across regional markets Growing track record in the US: through Weitz and Orascom E&C (first world scale greenfield fertilizer plant in USS in 25 years) Proven ability to promptly respond and capitalize on new opportunities when they arise in existing as well new markets


MENA: Capitalize on Market Opportunities Core OC Markets: Middle East & North Africa




Project pipeline 2015 – 2020E US$35 billion

Project pipeline 2015 – 2020E US$157 billion

Project pipeline 2015 – 2020E US$102 billion

Summary Outlook  Core markets: Egypt, Saudi Arabia, United Arab Emirates,

Algeria and Iraq  US$ 1.4 trillion of planned projects through 2020,

excluding oil & gas, announced in core MENA markets  Egypt is launching major projects (such as Suez Canal,

power plants, roads)  Saudi Arabia is the largest construction market in the

region and infrastructure spending continues  United Arab Emirates is the second largest market: driven

by infrastructure spending and Dubai Expo 2020 – a key focus market for us US$ 1.4 Trillion New Awards Expected in Core MENA Markets from 2015 – 2020 (US$ bn) 1,433

Iraq Algeria


UAE Saudi Arabia Saudi Arabia:

United Arab Emirates:

Project pipeline 2015 – 2020E US$674 billion

Project pipeline 2015 – 2020E US$465 billion




The Group is well positioned to Capitalize on Opportunities that MENA Markets Present to us Source: MEED Insight and MEED Projects


USA: Growing US Business and Track Record United States: Construction Spending (US$ bn)

United States: Construction Spending (US$ bn)

 Construction spending has returned to pre-economic crisis levels and is expected to return to near record levels by 2018 - construction sector expected to grow by 7.1%/ 6.6% in 2015 /2016


 New awards opportunities are expected to exceed US$ 4.6 trillion through 2018


 Non-residential market estimated to grow 5% p.a. 2015-2018, driven by educational, commercial and manufacturing projects



















 Power projects are expected to amount to US$ 455 billion through 2018


0.0 1994

 Significant infrastructure and industrial spending expected over the next 10 years


 Industrial projects are expected to amount to US$ 244 billion through 2018 Established to Pursue US Government Work

Acquiring Strong Presence Within the US

Organically Strengthening USA Operations Orascom E&C

Established in 1985 to work on US federal and USAID projects in Egypt and the Middle East

US general contractor based in Des Moines, Iowa with 160 years of experience in USA

In 1991, Contrack was recognized as a Top 400 US Contractor by ENR

 

One of the top contractors for the US Army Core of Engineers Strengthened US federal business following the acquisition of Watts (Weitz’s federal business) for Weitz

Source: US Census Bureau and Bloomberg

Acquired In 2012 thereby allowing the Company to establish strong presence in the US

Established Orascom E&C USA in 2013 to develop OCI N.V.’s fertilizer growth in the US, further strengthening the Company’s US foothold

Amongst the largest contractors in the US and the oldest ranked on the ENR Top 400 list

Construction of the first world-scale fertilizer plant in the US over the last 25 years

Construction of a methanol plant at Beaumont, Texas for Natgasoline LLC

De-bottlenecking project at OCI Beaumont, TX

Expected to benefit from growing petrochemical and fertilizer sectors

Weitz is a pure play on US general construction and is already benefiting from the rebound in construction activity – revenue exceeding $1.5bn prefinancial crisis


Strategic Investment in BESIX: 55% of Backlog in MENA Company Highlights

 Founded in 1909  Acquired 50% of the BESIX Group in a joint leverage buyout in partnership with BESIX management in 2004  Significant value creation in the process, an investment that is considered strategic to the Group

 Key strategic player that allows OCI to access particular projects  Global Presence: operates in 6 continents with a key focus on Europe, Middle East, North Africa, Australia and select African markets

EUR 2.7 bn

EUR 2.3 bn

EUR 194 mn

2013 backlog

2013 revenue

2013 net cash

 MENA experience: over 60 years of experience in the MENA region ‒ Operating major water, sewage and recycling concessions in Ajman, Al Wathba (Abu Dhabi) and Al Allahamah (Al Ain), UAE

# 69

# 99

‒ Facility management experience in UAE including Burj Khalifa (technical upkeep) and Dubai Mall

2014 ENR International contractors ranking

2014 ENR Global contractors ranking

‒ OC/BESIX have complementary expertise that allows for joint cooperation on projects  Europe experience: Benelux’s largest contractor focused on high-end commercial and infrastructure projects

Burj Khalifa World’s tallest building

 Concessions & Real Estate Portfolio: BESIX leverages its construction and property development expertise to invest in concessions

2013 backlog in UAE/Bahrain

Employees worldwide

Countries active in

The BESIX Group – 2004 v. 2013 (EUR Million) Revenue

Sheikh Zayed Al Nahyan Mosque - Abu Dhabi









Yas Island Development Abu Dhabi Sheikh Zayed Bridge Abu Dhabi



 Annual divided: consistent annual dividend stream

Tangiers Port, Morocco Africa’s largest port

Ferrari Park Experience Abu Dhabi


1,364 877 64

King Abdullah Sports City Jeddah, Saudi Arabia 2004



Source: based on public information – BESIX 2013 Activity Report and company website





Pursuing Value Accretive Investments  Construction business was integral to OCI’s value creation story:

– developed and incubated businesses both independently and with partners for nearly 20 years … – … successfully translated into shareholder value creation  Key executives have been with the Company for 10+ years, guaranteeing OC’s continuity in its ability and intention to create new growth channels

Became top 10 global cement producer in 2007 with 44 mtpa capacity

1996 – – 2007) (1996 2007

Divested to Lafarge at an EV of US$ 15 billion

Distributed US$ 11 billion in dividends in 2008

Started construction of a new port near Suez Canal in 1999 and was main contractor since privatization

Only BOT privatized port in Middle East at the time – OCI held 45% stake

Sold stake to Dubai Ports World for US$ 372 million in 2007

Exit Multiple: 20.6x EV/EBITDA

IRR: 49% over 8.5 year investment period

Started construction of first fertilizer plant in 1998

Identified and invested in EBIC in 2005 (30% stake)

Constructed EFC, which was acquired in 2008

Sokhna Port (1999 – 2007)

Fertilizer & Chemicals Group (2005 – Present)

Sorfert Algérie in JV with Sonatrach built by OCI, commissioned end-2013

Started construction of Iowa Fertilizer Company (USA) in 2012

Orasqualia (2009 – Present)

Started construction of Natgasoline (USA) in 2014

First seed for company’s infrastructure investments

Constructed and operates New Cairo Wastewater treatment plant

Our participation as the developer of the project positioned us well to be awarded relevant portion of the EPC contract

Egypt’s first PPP concession in JV with Aqualia (20 years)

Cement Group: Capacity Build-Up Constructed

40.0 Cement Capacity (mtpa)

Started cement business with 1.5 mtpa green-field project in Egypt in 1996


35.9 32.0

30.0 19.5

20.0 13.8 10.0 1.5







1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Fertilizer & Chemicals Group: Capacity Build-Up 14.0 Constructed Fertilizer Capacity (mtpa)

Cement Group


Under Construction

Acquired 11.9



10.0 7.8

8.0 5.7





4.0 2.0



0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016

History of Successfully Incubating New Businesses Across a Number of Industrial and Infrastructure Sectors 17

Strategic Investments and Self-Generated Work Develop New Opportunities – Infrastructure Investments Power Sector: OC-IPIC Partnership  Partnership with the Abu Dhabi-based IPIC to jointly develop a 2,000 – 3,000 Megawatt coal fired power plant initiative in Egypt

 The MENA region is encouraging private investment in power & infrastructure as governments seek leaner balance sheets and stimulate private and foreign investment  Egypt’s power capacity needs expected to double to 60,000 MW over next 10 years at estimated investment cost of $35bn-$40bn – private sector involvement is key Owner of Egypt’s first PPP project  OC and Aqualia (a leading wastewater management company based in Spain) established Orasqualia, Egypt's first public-private partnership, in 2009  The US$472m/EGP2.646bn project was initiated by the New Urban Communities Authority (NUCA) and was tendered by the Egyptian Ministry of Housing, Utilities and Urban Development in coordination with the Ministry of Finance as a 20 year PPP  Construction completed in 2013 and plant operations commenced in Q4 2013 Construction focus on upcoming infrastructure investments and PPP projects  OCI is bidding for other BOT/PPP projects – solid track record as co-contractor and owner of Egypt’s first PPP project  Investments to be funded through off-balance sheet project financing and OC’s equity to be disbursed throughout the life of construction from OC’s cash flow generation

 OC would be the EPC contractor or part of an EPC consortium

Long-term investments with additional revenue and stable cash flows


Strong Financing Capabilities  Developed, structured and financed over US$ 10 billion in corporate and project financing debt over the last decade  Leveraged our expertise to secure debt for complex industrial and infrastructure projects worldwide across several industries  Strong relationship with major regional and international banks

 Comprehensive knowledge of debt raising, including different types of financing products with risk allocation regime  Streamlining internal off-shore cash pooling structure to increase efficiency of cash up-streaming among our subsidiaries and reduce cost of borrowing Precedent Transactions

EGP 566m

 First PPP transaction in Egypt

 Longest EGP funding structure for private sector without benchmarks for matching tenors  Deal closure in a record time of 7 months in Jan 2010  15 year tenor with 3% over Bid Corridor  Awarded PPP African Deal of the Year by Euromoney/Project Finance Magazine

USD 1.2bn

 Issued US$ 1.2 billion Midwest Disaster Area tax-exempt bond in May 2012  3x oversubscribed and rated BBby both S&P and Fitch  Interest rate reduced by 10 basis points due to high demand  The largest non-investment grade transaction ever sold in the US tax-exempt market

EUR 1.1bn

 Largest and first private sector non-recourse project finance facility done in Algeria involving local banks only  Largest nitrogen fertilizer complex in Africa

USD 1.9bn

 USD 1.9bn refinancing in October 2011  Refinancing to help streamline construction and fertilizer groups

 15 year tenor

 Included Egyptian, regional and international banks as well as the IFC

 Pricing: 5.95% & 1.95% post construction completion

 Covered subsidiaries in Europe and the Middle East

Relationships with Lending Institutions


Financial Section

Significant Rebound in Revenue and Healthy Backlog Coverage Total Revenue (US$ Million)

Backlog / Revenue (US$ Million)




1,811 329



1,624 1,192







9M 2013



9M 2013

9M 2014








9M 2014



Note: geographic segmentation based on location of entity managing the contract; USA is comprised of Orascom E&C, Weitz and Contrack projects ex. Qatar and Bahrain

Development of Revenue in MENA 

Increase in MENA contribution by 28% during 9M 2014 primarily due to growth in Egypt and Saudi Arabia

Several significant projects that were signed at end-2013 began contributing to revenue in 2014

Significant contributors include King Abdul Aziz Airport and National Guard’s military housing in Saudi Arabia and Cairo-Alex Freeway and Giza North Power Plant in Egypt

Revenues declined in 2012 due to a slowdown in Egypt related to political events and the winding down of large projects in Algeria

Development of Revenue in USA 

During 9M 2014, contribution from the USA increased by 37% primarily due to rapid execution of large projects

Significant contributors to revenue were Iowa Fertilizer Company (IFCo) by Orascom E&C as well as Trillium Woods Senior Living Centre and Wells Fargo campus by Weitz

Increase in 2013 revenue led by integration of Weitz and execution of IFCo

2011 and 2012 revenue categorized as part of USA includes Contrack projects ex. Qatar and Bahrain; reduction of work in Afghanistan after 2012 has been outweighed by increase in work in the Pacific Rim in 2013 and 2014


Deleveraging Strategy: Net Debt Down 58% From 31 Dec 2013 to 30 Sept 2014 Net Debt Overview USD million




9M 2014

Loans and borrowings





Less: cash





Net debt





















Loans and borrowings





Less: cash





Restricted Cash





Adjusted net debt





Total equity Net debt/equity EBITDA Net Debt / EBITDA

Loans & borrowings


Net debt









Adjusted net debt calculation 387 368 141

Of which: 164




9M 2014

Commentary  OCI N.V. capitalized the Engineering & Construction Group via debt settlements of approximately US$150 million over the 9 months period to 30 September 2014, which was previously related to OCI S.A.E. group debt (including fertilizers)  Net debt decreased to US$164.3 million as of 30 September 2014 from US$387.1 million as of 31 December 2013  Gross debt was reduced by 27% from 31 Dec 2013 to 30 Sept 2014  Average cost of borrowing is 7-8%  Equity decreased from 31 December 2011 to 31 December 2012 primarily due to provisions for the tax dispute liability 22

Deleveraging Strategy: Capitalisation and Indebtedness as of 31 Dec 2014  The demerger allows OC to pursue a capital structure appropriate for its own business strategy and capital needs  The Company continues to pursue its deleveraging strategy  The tables below set out the OC’s capitalisation and indebtedness as at 31 December 2014 – this information has not been audited, is based on management accounts and excludes proceeds from the Egyptian Offering USD million

As at 31 Dec 2014


As at 31 Dec 2014


Guaranteed current debt Secured current debt Unguaranteed/unsecured current debt Total current debt Guaranteed non-current debt Secured non-current debt Unguaranteed/unsecured non-current debt Total non-current debt Share capital Legal reserves Other reserves Shareholder's equity1 Total debt and shareholder's equity


USD million

of minority share

369.3 35.9 25.4 430.6

A. Cash & Cash equivalents A1. Net Egyptian Offer proceeds B. Trading securities C. Liquidity (A+A1+B)

30.9 30.9

D. Current financial receivable


E. Current bank debt F. Current portion of non-current debt G. Other current financial debt H. Current financial debt (E+F+G) I. Net current financial indebtedness (H-C-D) J. Non-current bank loans

379.0 7.2 386.2 430.6 30.9 461.5 75.3 -



Revenue & Backlog Key Highlights – BESIX Pro Forma Consolidation Total Revenue (US$ Million) OC

Backlog / Revenue (US$ Million)

BESIX 2.4x

3,887 3,013


2,848 1,537



1,390 2,350







Backlog, split (US$ Million)1 OC


Net Debt (US$ Million)




7,698 6,896 5,648






2,131 (104)

2,027 1,869


140 4,869





5,566 3,840


9M 2014







¹ 9M 2014 pro forma figures are comprised of BESIX backlog and new awards as well as other construction-related JV’s; annual figures accurately reflect BESIX disclosure figures on a proportionate and FX-translated basis; 9M 2014 backlog for BESIX and other JV’s sourced from OCI N.V. Trading Updates; BESIX figures are sourced from annual public BESIX filings and converted at the following rates: EUR:USD BS rate of 1.2957, 1.3190, 1.3761 for 2011, 2012, and 2013 respectively. EUR:USD IS rate of 1.4028, 1.3041, 1.3284 for 2011, 2012, and 2013 respectively


EBITDA Bridge Analysis USD million Net profit / (loss) Profit / (loss) attributable to: Owners of the Company Non-controlling interests Income tax Profit / (loss) before income tax Income from associates (net of tax) Financing income & expenses Finance income Finance Cost Net finance cost Depreciation & Amortization EBITDA Margin Provisions & Other One-Off Items EBITDA pre-provisions Margin




9M 2013

9M 2014






199.9 8.6 -56.4 264.9 109.1

-609.3 8.6 -555.8 -44.9 79.7

-14.7 14.4 -0.7 0.4 58.4

56.3 10.5 -10.7 77.5 71.5

-89.9 10.4 288.7 -368.2 -174.9

10.2 -43.6 -33.4

29.3 -75.2 -45.9

81.9 -109.2 -27.3

52.9 -64.9 -12.0

101.3 290.5 16.0% -30.0 320.5 17.7%

93.5 14.8 1.0% -115.8 130.6 9.0%

78.6 47.9 2.0% -46.9 94.8 4.0%

56.7 74.7 4.6% 0.0 74.7 4.6%

26.0 -19.5 6.5 48.3 -151.5 -7.0% -149.4 -2.1 -0.1%

Commentary  Total provisions during the 9 months to 30 September 2014 amounted to US$149 million, of which US$98.5 million in SG&A expenses  The US$98.5 million in provisions in SG&A expenses included US$48.5 million in VAT owed to the company for work completed in Algeria and a one-off US$22.9 million provision related to a project in Algeria  In addition, some smaller valuation allowances totalling US$18.0 million were taken to cover risks related to accounts receivable as well as under billings and aged accounts receivable that are older than 360 days in other MENA markets  Excluding provisions, SG&A would have increased by US$25.9 million, or 28.4%, in line with the increase in revenue during the period.


CAPEX and Investments CAPEX (US$ Million)









Historical Capex Review  Capital expenditures include: –

Acquisition of property, plant and equipment related to projects under construction. For example; construction cranes, bulldozers, excavators, diggers, trucks, and other related construction equipment required by the Group’s projects

Acquisitions of companies

 Majority of project related CAPEX is financed through advance payments and cash flow  In 2012: –

Orascom Construction acquired indirectly all the membership units of The Weitz Company, LLC. for a net consideration of USD 27.4 million, which includes an amount of goodwill of USD 8.5 million

Due to expansion into Saudi (a new core market for us); USD46 million was spent during the year



Longstanding Position as Global Contractor of Choice Track Record and Competitive Strengths  Tradition: construction has been the core business since inception in 1950 – Orascom Construction is now a leading global company employing c 53,000 people, with over 60 years of experience in MENA markets and 160 years in the United States through Weitz and Contrack  Wide variety of core competencies: execution of large and complex infrastructure, industrial and commercial projects  Track record with global presence: proven track record in over 20 countries across infrastructure, industrial and commercial sectors, with strong focus on high growth markets and significant local resources – ranked 67th on ENR’s 2014 International Contractors rankings, the highest MENA construction company  Experienced management team: key executives have been with the Company 10+ years and have a proven track record of growing the business both organically and through acquisitions  Strong and well-established client base: comprising sovereign and blue chip clients with longstanding relationships  Backlog: record level of quality backlog and strong balance sheet, now scaled to embark on next phase of growth and margin expansion – 39% increase y-o-y in backlog to US$ 5.6 bn – Strong momentum in 2014 with additional US$ 3.9 bn in new awards during 9M 2014, up 6x y-o-y  High corporate governance standard: culture of strict corporate governance as part of a publicly traded company since 1999 enhanced by experience as part of a Dutch company listed on Euronext Amsterdam for 2 years


Entrepreneurial Track Record Creating Shareholder Value  Shareholder return: IRR of c.40% on US$ basis for OCI S.A.E. / OCI N.V. since 1999 IPO – Shareholder return driven by strong longstanding leadership along with investment vision of principal shareholders  Focus on infrastructure investments to provide steady cash flow and support long-term growth

 Awarded first PPP concession in Egypt in 2009 – co-contractor and co-operator of Orasqualia  History of successfully entering new markets: – Expanding outside Egypt since early 1990’s; operating in four countries as at IPO and in more than 20 countries today – Backlog outside Egypt now accounts for 73% of total as at 30 September 2014 – Successful acquisitions: BESIX in 2004 and Weitz in the United States in 2012  History of successfully incubating new businesses including: – Cement: developed a top 10 global cement producer primarily through greenfield projects in over 10 countries until divestment in December 2007 – Ports: held a strategic stake in a key port in Egypt on a Build-Own-Operate (BOT) basis, which was divested in 2007 – Fertilizer & Chemicals: built three of OCI N.V.’s operating plants in Egypt and Algeria, and in the construction phase for two production complexes in the United States, which will help transform the business of OCI N.V. to a top three global fertilizer producer


Appendix Wide Range of Core Construction Competencies

Global Contractor of Choice – Infrastructure (53.8% of Backlog) Infrastructure Power Generation  Leader in energy projects in Egypt and Algeria  Construction of more than 15,000 MW of power generation capacity across the Middle East  EPC contractor on Kuraymat, the Middle East’s first solar power plant

Kuraymat Solar Power Field

Water / Wastewater


 Alliance with water, desalination and wastewater process providers  Co-constructed and cooperates the first wastewater treatment plant under Egypt’s PPP program  Projects include the Six of October Wastewater Treatment plant (100,000 cubic meters of capacity) and the Hamma water desalination plant in Algeria (OC-BESIX JV)

 Over 15 airports constructed in the Middle East  Own a modern fleet of road specialty equipment  Over 1,020 kilometres of rail projects in the Middle East, through 15 railway projects in the last 15 years  Constructed El Ferdan Bridge, world’s the largest swing bridge  Own railway specialty equipment  BESIX is a leading marine / port contractor - built Africa’s largest port

Hamma Desalination Plant

El Ferdan Double Swing Rail Bridge

Social & Federal Infrastructure  Top contractor for the United States Army Corps of Engineers and other military and naval branches through Contrack  Contrack is specialized in US Government funded defense projects in the Middle East and Central Asia  Watts Constructors is specialised in in US Government funded defense projects in the US and its territories (Pacific Rim)

Submarine Drive-In Magnetic Silencing Facility, Beckoning Point, Pearl Harbor, Hawaii


Global Contractor of Choice – Industrial (34.6% of Backlog) Industrial Petrochemicals / Oil & Gas  Over 12 million metric tons per annum of nitrogen fertilizer capacity completed in Egypt, Algeria, and under construction the United States  Seven petrochemicals projects (excluding fertilizers) in the Middle East  Strategic alliance with major EPC companies in the field including KBR and Uhde

Damietta LNG Pot

Manufacturing & Pharmaceuticals  Repeat business / direct negotiation  AstraZeneca's first pharmaceutical plant in the region  Leading contractor for Procter & Gamble in Egypt and Nigeria

 Leading steel plant contractor in Egypt

Heavy Industrials  Over 40 million metric tons per annum of cement production capacity around the world  Key regional partner for leading cement technology providers including FL Smidth and Polysius

 Weitz has constructed more than 50 projects for Cargill Inc.

Sygentia Seeds Processing Unit

Egyptian Cement Company


Global Contractor of Choice – Commercial (11.6% of Backlog) Commercial Hotels & Resorts


 Leading contractor for hotels in Egypt

 World’s tallest building: Burj Khalifa

 Construction of several luxury beach resorts and communities on the North Coast and Red Sea

 Nile City Complex in Egypt

 Clients include Emaar Misr, Palm Hills, Fairmont, Marriott

JW Marriott, Mirage

Leisure / Commercial


 Largest archaeological museum in the world: Grand Egyptian Museum

 Leading contractor for residential communities and housing developments in Egypt

 Egypt’s largest leisure and retail centres: Mall of Egypt and Cairo Festival City

 Weitz is a leading retirement community contractor in the United States

 Repeat work with Al Futtaim

Nile City Complex

Mall of Egypt

Le Meriden/New Hyatt, Cairo


Case Study: Construction of the First PPP Project in Egypt PPP Wastewater Treatment Plant – Egypt  Client: New Urban Communities authority ( NUCA)  Contract Structure: EPC Joint Venture Member  Technology provider: Aqualia  Duration:

2 years construction + 18 O& M

 Capacity:

250,000 m³/ day

 Summary: The New Cairo Wastewater Plant’s execution is on a Design, Build, Finance, and Operate basis (DBFO) with the renewal and transfer of the ownership back to NUCA at the expiry date or early termination date; the new domestic wastewater treatment plant has a capacity of 250,000 m³/day to treat domestic wastewater within New Cairo through a Private Public Partnership. The project duration is 2 years for construction and 18 years for operation and management  Developer: Orasqualia for the development of wastewater treatment plant S.A.E; a company formed 50%/50% between Orascom Construction Industries and Aqualia (Spain) part of the FCC group


Case Study: Iowa Fertilizer Company (Industrial) Plant Overview


Nitrogen fertilizer & industrial chemical complex currently under construction – first greenfield plant to be built in USA in 25 years

Expected to produce up to approximately 2 million metric tons of nitrogen fertilizers (ammonia, granular urea, and UAN) and diesel exhaust fluid

Broke ground on 19 November 2012 and scheduled to begin production in Q4 2015

OCI Engineering & Construction is EPC contractor, using KBR ammonia and Stamicarbon urea technologies, and Tecnimont and Uhde as main engineering and procurement subcontractors

Currently 1,900 construction workers on-site; overall mechanical completion and operations on schedule with the engineering, procurement and construction of the project

Construction Progress on Schedule


Case Study: Cairo Festival City (Commercial) Project Overview


Constructed one of Cairo’s largest retail centers comprising 400 shopping units

Located in the Cairo suburb of New Cairo.

Contract size: over $ 340 million

OCI’s share: 35%

Awarded the main contractor role for this project in 2009

The retail center contains a covered shopping area with more than 400 shopping units including hypermarkets and cinemas, integrated with an outdoor retail village

Includes a 3 basement level car parking


Appendix Construction Materials & Property Management

Construction Materials and Property Management 100%

 Founded in 1995, manufactures fabricated steel products primarily for energy, petroleum, industrial and construction clients  Operates two plants in Egypt, supplying clients primarily in North Africa, the Middle East and Europe


 Established in 2000, manufactures and installs glass, aluminium and architectural metal works  Provides services in landmark projects across its core markets, often in conjunction with Orascom Construction and BESIX  Operates a plant in Egypt with a total production capacity of 250k square meters, supplying products to clients primarily in Egypt and North Africa


 Egypt’s premier facility and property management services provider  Main clients are large-scale financial and commercial business complexes in Egypt housing the headquarters of regional offices of more than 70 local and international companies


 Owner, developer, operator and utility facilitator of an 8.75 million square meter industrial park located in Ain Sokhna, Egypt  Develops industrial land and provides utility services for light, medium and heavy industrial users in Ain Sokhna, Egypt

 Established in 1997, UPC owns DryMix, Egypt’s largest manufacturer of cement based ready mixed mortars in powdered form used by United Paints & Chemicals the construction industry 56.5%  Capable of producing 240k metric tons of productand and supplies products to clients in Egypt and North Africa


National Pipe Company 40%


 Holds 50% stakes in BASF Construction Chemicals Egypt, Egyptian Gypsum Company and A-Build Egypt, forming a group of companies that manufacture diversified building materials, construction chemicals and specializing contracting services  Subsidiaries operate from 4 plants in Egypt and 1 in Algeria, supplying products to clients primarily in Egypt and North Africa

 Manufactures precast/pre-stressed concrete cylinder pipes and pre-stressed concrete primarily  The two plants are located in Egypt –supply Egypt and North Africa, with annual production capacity of 86 km of concrete piping  Manufactures up to 70k kilolitres of decorative paints and industrial coatings primarily for the construction industry  Founded in 1981 and operates two plants in Egypt, supply products to clients in Egypt and North Africa


Appendix Additional Backlog Information

Evolution of Backlog Backlog by Sector 100% 80%

14% 8%

Backlog by Client








1% 22%


60% 40%










9M 2014














100% 20%



0% 7% 19%



6% 16%

8% 9%









9M 2014





60% 2%


9M 2014 Public

Backlog by Brand

80% 37%

2013 Private

Healthy balance of sovereign and private clients

Backlog by Geography





Dominance of higher-margin infrastructure and industrial work








1% 12%







9M 2014



40% 20%



2011 Rest of World



Saudi Arabia

Rapid expansion into Saudi Arabia and USA





Increasing diversification across brands

___________________________________ Note: Backlog charts exclude BESIX and other joint ventures accounted for under the equity method; backlog excludes intercompany work; geographic segmentation based on project location


Top 20 Projects in the Backlog – 30 September 2014 Top 20 Largest Projects Represented 64% of the Total Backlog as of 30 Sept 2014 By Geography Rest of World 3.4%

By Sector

By Client

Commercial 4.2%

Egypt 19.8%

Infrastructure 46.7%

USA 42.7%

OCI N.V. F&C 40.0% Public 43.8%

Industrial 49.1%

Saudi Arabia 29.5%

Private 16.3%

Algeria 4.5%

Value: USD 3,613.0 million

% of total backlog: 64%

Average % completion: 16%

Top 20 projects portray key revenue drivers for OC Infrastructure and industrial work constitutes 96% of the top 20 projects Geographic segmentation mirrors that of the consolidated backlog picture with a slightly higher concentration in MENA

Note: geographic segmentation based on location of entity managing the contract; USA is comprised of Orascom E&C, Weitz and Contrack projects ex. Qatar and Bahrain; RoW should be grouped with USA


Pro Forma Snapshot Including BESIX Proforma Backlog Including 50% of BESIX1 USD million




9M 2013

9M 2014









New awards














New Awards







USD billion


Proforma incl. BESIX

8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2011

*9M pro forma figures are comprised of BESIX backlog and new awards as well as other construction-related JV’s; Annual figures accurately reflect BESIX disclosure figures on a proportionate and FX-translated basis

2012 Backlog

Proforma Revenue and EBITDA – assumes 50% consolidation of BESIX

Revenue – USD billion

9M 2013

9M 2014

New Awards

Evolution of BESIX Backlog

Adjusted EBITDA – USD million 3.9



Standalone – EUR billion


3.6 3.1



3.1 2.7


2.3 186 134







2012 BESIX










¹ 9M 2014 backlog for BESIX and other JV’s sourced from OCI N.V. Trading Updates; BESIX figures are sourced from public BESIX filings and converted at the following rates: EUR:USD BS rate of 1.2957, 1.3190, 1.3761 for 2011, 2012, and 2013 respectively. EUR:USD IS rate of 1.4028, 1.3041, 1.3284 for 2011, 2012, and 2013 respectively; Adjusted EBITDA represents OC EBITDA pre-provisions and one-offs plus BESIX EBITDA


Appendix Additional Financial Information

Key Revenue Drivers  Record backlog levels as at September 2014 Existing Backlog

Geographic Footprint

Provides revenue visibility for 18-24 months

Since September 2014 we have received additional new awards on a direct order basis totalling US$ 642 million in Egypt, amongst other awards totalling c. US$1.0 billion for the Group (excl. BESIX)

 We have entered into several new markets over the past 3 years, including US, Saudi Arabia, and Iraq, which we consider today core to our operations and where we expect to continue to pursue growth initiatives –

Strong anchor in the US industrials market due to recent first mover advantage into the market underscores our growth initiatives

 Strong momentum of new awards stemming from significant pipeline of projects in our core markets

New Awards & Bidding Pipeline

The group actively bids for new projects in key markets such as Egypt, Saudi Arabia, US

Our varied skill-set has allowed us to establish a significant track record of proven industrial and infrastructure experience, which gives us a competitive advantage vis-à-vis our competitors in bidding for new projects

We have established an extensive and stable network of clients in our markets, which include sovereign or sovereign-backed entities and large private sector clients. The quality of our work has enabled us to maintain, on the whole, strong and long-standing relationships with several repeat clients

The strength of our balance sheet, including available direct and contingent facilities, provides us with the capacity to bid for and execute large scale projects which by nature require adequate contractor balance sheet capitalization

 We aim to grow our recurring revenue streams by investing in value-accretive infrastructure related projects Stable and Recurring Cash Flows

We are growing our sources of stable long-term cash flows through value accretive concessionary contracts

We command a disciplined approach in evaluating potential investments / acquisitions, evident by our strong track record of high level of investment returns

Our participation as the developer of these projects positions us well to be awarded the relevant portion of the EPC contract


Profitability Drivers Profitability Profile of Our Core Markets

 Our consolidated margins are a function of the profitability profile of the main contributing markets in which we operate –

Generally, developed markets (e.g. US) yield lower margins vis-à-vis emerging markets (e.g. MENA)

Cost reimbursable contracts in the US, with predictable profitability

 We are able to minimize our operating and overhead costs due to our presence in low-labour cost markets Cost Base and FX Movements

 Our backlog is a natural hedge against currency exposure with a significant portion in US$/US$ pegged currencies, driving revenues and improved profitability –

Our backlog and financials are reported in US$, while exposed to a wide range of currencies including EGP, EUR, DZD, and JPY

We are mostly currency neutral, particularly in the US which mitigates against any currency risk

 Historically, our business faced extraordinary factors that negatively impacted our profitability – Exogenous Factors

One-off factors, such as events related to the Arab Spring or political uncertainty in Afghanistan, may affect our operations and profitability

 Our COGS may include provisions/one-off items related to on expected future losses regarding certain projects –

As part of our regular review of expected future profits and losses on certain projects, our COGS may include provisions for future losses expected to be incurred on certain projects


Income Statement USD million




9M 2013

9M 2014













Gross profit
































Results from operating activities


















EBITDA pre-provisions












Revenue % growth

Construction cost and cost of sales

Other income Selling, general and administrative expenses of which provisions

Other expenses


Commentary  Gross profit decreased during 9M 2014 due to: –

New projects typically require the Company to take on mobilization, labour, and administrative costs at the onset of project execution

Cost of construction includes a US$12.8 million impairment related to lost equipment in Iraq following evacuation of our construction workers from the Baiji power plant site

 2013 gross margin decreased primarily due to: –

This decrease was primarily attributable to the full integration of lower margin United Statesbased work from Weitz

Inflationary pressures in Egypt and reduction of operations in Egypt of about 60 days due to curfews imposed across the country during the summer months

Financing income & expenses Finance income






Finance Cost






Net finance cost






Income from associates (net of tax)






Profit / (loss) before income tax






Income tax






Net profit / (loss)





















 2012 gross margins decreased due to: –

Higher costs in Egypt due to revolution-related inflation, in particular labour costs and an increase in construction costs

Lower margin projects in Egypt in 2011 during the revolution. These projects were mostly completed by end-2013

Profit / (loss) attributable to: Owners of the Company Non-controlling interests Net profit / (loss)


Other P&L Line Items USD million Financing income & expenses Finance income Finance Cost Net finance cost Associates Profit / (loss) before income tax Income tax Net profit / (loss) Profit / (loss) attributable to: Owners of the Company Non-controlling interests Net profit / (loss)




9M 2013

9M 2014

10.2 -43.6 -33.4 109.1 264.9 -56.4 208.5

29.3 -75.2 -45.9 79.7 -44.9 -555.8 -600.7

81.9 -109.2 -27.3 58.4 0.4 -0.7 -0.3

52.9 -64.9 -12.0 71.5 77.5 -10.7 66.8

26.0 -19.5 6.5 -174.9 -368.2 288.7 -79.5

199.9 8.6 208.5

-609.3 8.6 -600.7

-14.7 14.4 -0.3

56.3 10.5 66.8

-89.9 10.4 -79.5

Commentary  One-off items

 Associate income

Following the Company’s exoneration of any tax evasion by the Independent Appeals Committee in 2014, several provisions for this liability have been reversed during the 9M 2014 period. The tax dispute liability has been allocated to Orascom Construction on a 50% basis, including tax amounts of US$360 million already paid in 2012

OC has investments in a number of complementary construction and materials businesses, including a 50% shareholding in BESIX, Orasqualia (a waste water treatment plant concession) and investments in manufacturers of fabricated steel products, glass curtain walling, paints and concrete pipes as well as investments in property management companies

The total impact of the tax liability amounts to c.US$525 million cost in 2012 and US$335 million profit during 9M 2014

Associate income decreased by US$18.8 million, or 24.4%, in 2013, primarily due to lower contributions from BESIX

Finance Income in 2013 included a foreign exchange gain on the tax settlement with the Egyptian Tax Authority

Finance Cost in 2013 and 9M 2014 included a non-cash interest charge related to the tax dispute liability and a subsequent reversal respectively

Associate income in 9M 2014 includes US$188 million loss for the termination of the Sidra Medical Centre project in Qatar

 Finance income –

Finance Income decreased during 9M 2014 primarily due to lower FX gains related to the Egyptian Grand Museum project

 Income tax –

The Group’s blended tax rate is determined by revenues in the different jurisdictions, mainly Egypt, Saudi Arabia and the US. During 2014, the corporate income tax rate in Egypt increased from 25% to 30%

Taxes in 2012 and 9M 2014 included a tax provision for the tax dispute liability and a subsequent reversal respectively

 Minority interest: –

In 2013 and 9M 2013 mainly comprised of 60%/40% Orascom Saudi JV with Saudi Binladin Group and 56.5% UHC JV

UHC contribution significantly larger than that of the other entries in 2011 and 2012


Balance Sheet - Assets

1 2 3

2 4

USD million Assets Non-current assets Property and equipment Goodwill and other intangible assets Trade and other receivables Associates Deferred tax assets Total non-current assets Current assets Inventories Trade and other receivables Contracts receivables Cash and cash equivalents Total current assets Total assets





379.8 4.1 408.3 1.8 794.0

331.4 9.8 130.5 437.0 4.2 912.9

269.4 13.2 368.9 494.8 7.7 1,154.0

239.2 13.1 49.7 377.6 7.5 687.1

156.3 939.4 286.6 448.1 1,830.4 2,624.4

142.1 812.7 406.6 428.0 1,789.4 2,702.3

181.5 950.7 375.4 419.7 1,927.3 3,081.3

167.3 821.6 586.5 421.2 1,996.6 2,683.7

Commentary 1. 1

Goodwill relates to the acquisition of the Weitz Group in 2012

2. 2

Trade and other receivables: – In 2013 the increase in trade and other receivables is related to longer payment cycles in Egypt following the revolution, and to under billings in Saudi Arabia amongst others – During the nine month period ended 30 September 2014, OCI settled the majority of its intercompany balances between the Engineering & Construction and Fertilizer & Chemical groups in order to prepare the demerger of the Construction business, resulting in a decrease of non-current trade and other receivables (from US$441.1 million to US$27.8 million as at September 2014)

3. 3

Associates decreased from 31 December 2013 to 30 September 2014 due to provisions related to the Sidra Medical Centre Project in Qatar – As of Sept. 2014, investment in associates represents US$321million for BESIX, and US$55.8 million for all of the Group’s remaining equity accounted investees

4 4.

The increase in Contracts Receivables represents construction contracts in progress, primarily related MENA region projects 48

Balance Sheet – Liabilities & Shareholders’ Equity USD million Net investment Owner’s net investment Non-controlling interest Total net investment Liabilities Non-current liabilities Loans and borrowing Trade and other payables Provisions Deferred tax liabilities 1 Income tax payable Total non-current liabilities Current liabilities Loans and borrowings 2 Trade and other payables Billing in excess of construction contracts Provisions Income tax payables Total current liabilities Total liabilities Total net investment and liabilities





1,058.7 52.5 1,111.2

380.1 51.2 431.3

815.6 58.9 874.5

726.1 70.8 796.9

5.1 44.9 0.7 50.7

38.8 23.8 1.2 1.9 257.4 323.1

56.1 24.2 4.3 207.4 292.0

36.3 30.6


588.7 577.5 198.3 82.1 15.9 1,462.5 1,513.2 2,624.4

756.8 734.3 113.7 51.4 291.7 1,947.9 2,271.0 2,702.3

750.7 653.9 300.7 73.1 136.4 1,914.8 2,206.8 3,081.3

549.2 988.4 166.1 104.1 7.8 1,815.6 1,886.8 2,683.7


Commentary 1

 The increase in income taxes payable in 2012 is related to the Egyptian Tax Authority's tax dispute with OCI S.A.E. As a result of the favourable ruling in the tax appeal case, the Company has reversed liabilities (income taxes payable) in Q3 2014

2 During the 9-month period to 30 September 2014 accrued expenses included in trade and other payables increased as a result of prolonged payment terms relating to payables for our US operations


Appendix Board of Directors and Management Bios

Board of Directors Executive Directors

Osama Bishai CEO

 Joined OCI in 1985 and held the position of Managing Director of the Construction Business since 1998  Played a key role in developing the business of the Group, particularly in the oil & gas sector, and OCI N.V.’s infrastructure and industrial investments in Egypt, Algeria and USA  Holds a Bachelor of Science degree in Structural Engineering from Cairo University and a Construction Management Diploma from the American University in Cairo Non-Executive Directors

Nassef Sawiris Chairman

 Chief Executive Officer of OCI N.V.  Joined the Orascom Group in 1992 and became the Chief Executive Officer of OCI N.V.’s predecessor, Orascom Construction Industries (OCI S.A.E.), in 1998  Appointed Chairman of OCI S.A.E. in 2009  Mr. Sawiris is also a board member of Lafarge S.A.  Holds a BA in Economics from the University of Chicago, USA

Arif Naqvi

 Founder and Group Chief Executive of The Abraaj Group which he established in 2002  With over 25 years’ experience of investing in public and private companies, Mr. Naqvi has led the Group’s involvement in some of the most notable private equity transactions in growth markets over the last decade  Mr. Naqvi has been the recipient of numerous awards, including the Oslo Business for Peace Award, and the Sitara-i-Imtiaz, a prominent civilian honor awarded by the Government of Pakistan  Mr. Naqvi is a graduate of the London School of Economics and Political Science

Salman Butt

    

Chief Financial Officer of OCI N.V. Mr. Butt joined OCI S.A.E. as CFO in 2005 An international banker with over 20 years of banking experience Previously the head of Investment Banking for the Samba Financial Group in Saudi Arabia from 2003-2005 For 18 years prior to this, he worked with Citibank in Pakistan, Hong Kong, the United Kingdom, Egypt and Saudi Arabia Mr. Butt holds a Masters degree in Business Administration from the University of Texas at Austin, USA, and a Bachelor of Science degree in Industrial Engineering from the Middle East Technical University, Ankara, Turkey


Board of Directors Independent Non-Executive Directors

Sami Haddad

Khaled Bichara

Azmi Mikati

 Mr. Haddad has decades of experience in both the private and public sectors, specifically in finance, politics and academia  Most recently he was also General Manager of Byblos Bank from 2008 to 2014  Previously at the International Finance Corporation, part of the World Bank Group for more than 20 years in a variety of positions including Director of the Middle East and North Africa based in Cairo  In 2005 he became Minister of Economy and Trade in Lebanon, a position which he held for three years  Mr. Haddad holds an MA in Economics from the American University in Beirut and pursued his postgraduate studies at the University of Wisconsin-Madison  Chairman of, and co-CEO of Accelero Capital  Prior to joining Accelero Capital, Mr. Bichara was CEO of Orascom Telecom Media and Technology (OTMT), Group President and COO of VimpelCom Ltd. as well as Group Executive Chairman of Orascom Telecom Holding  Played a pivotal role in the 6.6 billion merger of VimpelCom with Wind Telecom S.p.A, to create the world’s sixth telecommunications carrier  Mr. Bichara holds a Bachelor of Science degree from the American University of Cairo, Egypt  CEO of M1 Group Ltd., a diversified investments holding company spanning telecommunications, real estate, aviation, finance, retail and consumer goods  Mr. Mikati was the CEO of Investcom LLC (formerly Investcom Holding Sa) where he was responsible for the global strategy and implementation  He is also a Director of M1 Group Ltd. and a Non-Executive Director of MTN Group Ltd  Prior to this role he served as Director of T-One Corporation (International Carrier) and was also a board member of FTML (France Telecom subsidiary and the previous operator of one of two mobile networks in Lebanon)  Mr. Mikati holds a Bachelor of Science degree from Columbia University, United States


Senior Management Mark Littel CFO

Dalia Khorshid Corporate Treasurer

Maged Abadir Operations Director Orascom

Wahid Hakki GM Contrack

Leonard Martling GM Weitz

 Joined OCI N.V. in 2014 and brings extensive financial and audit experience and leadership  Previously at KPMG which he joined in 1985 and became a partner at in 2000. Audited and advised global clients at corporate and divisional levels and advised in the development and implementation of internal controls for international clients  Member of the Royal Dutch Institute of Chartered Accountants  Joined OCI in 2005 and has since headed the Company’s corporate treasury team  Responsible for all fundraising, liquidity and cash management, trade/contingent facilities management, Group Treasury control and administration, in-house bank management and interest rate and foreign exchange exposure management  Prior to joining OCI, was with Citibank for 8 years, where she most recently held the position of Vice President  She began her banking career with Commercial International Bank. Ms. Khorshid holds a Bachelor of Arts degree in Business Administration from the American University in Cairo  Joined OCI in 1988 and currently serves as the Executive Director for Heavy Civil, Infrastructure and Roads.  Has led the development of OCI’s road-construction business in Egypt since 2005.  Holds a Bachelor of Science degree in Civil Engineering from Cairo University and a Master of Science degree in Civil Engineering from Pennsylvania State University  Joined Contrack in 1994 and has been responsible for overseeing operations at the company’s US headquarters in Virginia  Previously a Project Manager for Sigal Construction Corp, as a Project Engineer and QC Manager with Pegel Arabia in Damman, Saudi Arabia, and as a site manager with OCC Weavers in Jeddah, Saudi Arabia  Received his Bachelor of Science degree in Civil Engineering from Ohio University in 1981 and a Masters degree in Structural Engineering from Penn State University in 1982    

Has been at Weitz for more than 30 years, holding a variety of positions within the operations segment Served as president of the Nebraska Business Unit, president of the Florida Business Unit, as well as Chief Operating Officer Appointed General Manager in 2012 A graduate of Kent State University with a Bachelor of Arts in Economics


Appendix Health, Safety and Environment

Continued Excellence in Health, Safety, Environment & Quality Low Lost Time Injury Rates

 Low Lost Time Injury Rates (LTIR) compared to global average  Quality and safety audits are conducted often, at all sites, and for all activities

LTIR Average Orascom Construction Contrack Weitz Average

2011 0.014 0.025 0.100 0.046

2012 0.016 0.081 0.200 0.099

2013 0.014 0.032 0.300 0.115

 For our commitment to health and safety, and for no ‘lost time injuries’, we have received safety awards and recognition letters from several international partners and clients, including the US Army Corps of Engineers, Kellogg Brown & Root, and ThyssenKrupp Uhde. These awards include: Project Name Orascom Construction El Merk Project, Lot 1 and 7 King Abdel Aziz Baiji Power Plant Marassi Project, PKG 13 Credit Agricole Egypt Head Office Terga Power Station Combined Cycle Contrack SIDRA Medical Center Al Reem Island Roads and Utilities Infrastructure Package 1 Navy Milcon (all phases) Waterfront Phases I and II Peace Vector Village

Proven HSE Record



Million Manhours Without LTIs

Algeria Saudi Arabia Iraq Egypt Egypt Algeria

Petrofac UAE International Limited Saudi Binladin Group The Iraqi Ministry of Electricity Turner International Middle East Credit Agricole Bank The Algerian Ministry of Electricity

9.0 7.0 4.0 3.6 3.0 2.5


Qatar Foundation





Bahrain Bahrain Egypt

US Army Corps of Engineers US Army Corps of Engineers US Army Corps of Engineers

6.0 4.0 1.0

Multiple Weitz locations have also worked over 1 million man-hours without a lost time accident Location

Million man-hours without LTIs

Weitz was awarded the following in 2013 in recognition of its safety performance:





OSHA CHASE Partnership Blue Level - Associated General Contractors



Award of Honor with Distinction - National Safety Council




Appendix Industry Overview

Market Size – Total Historical Value of Contracts Awarded in MENA  The Company’s core markets in MENA have historically exhibited strong construction levels with the value of contracts awarded averaging c. US$105 bn, led by the heavy investments in Saudi Arabia and the UAE  These markets, possessing undeveloped infrastructure and housing supply shortages, have high population growth rates which is increasing demand for utilities and social infrastructure, thus providing a platform for the historical level of contracts awarded to grow

Market Size – Value of Core Markets Contracts Awarded (US$ bn)(1) Egypt




Saudi Arabia








10.5 25.3 2.7 5.4

3.4 3.0

5.2 3.8

5.3 22.6


13.1 11.1 9.1

40.2 2.1





33.8 65.0 51.2 45.0



















Source: MEED Insight and MEED Projects Note (1): Core markets include Egypt, Saudi Arabia, UAE, Algeria, and Iraq


Growth Opportunities in Orascom Construction’s Core Markets Overview

Planned pipeline 2015 – 2020E currently estimated at US$ 1.4 trillion

 OC’s principal construction markets in the MENA region are supported primarily by strong underlying demographic, macroeconomic and infrastructure related trends


 Core markets in the MENA region: Egypt, Saudi Arabia, UAE, Algeria and Iraq 636.2

 Collective GDP of core market MENA countries expected to reach US$ 3.0 trillion by 2019 from US$ 2.2 trillion in 2013 (IMF)  2015 growth in core market MENA countries of 5.4% is led by Saudi Arabia (3.5%), UAE (5.7%), Algeria (4.7%) and Egypt (3.5%)  Growth is driven by public spending on industrial, infrastructure and commercial projects to support growing populations and reduce essential infrastructure deficits, as well as a resurgence in private sector spending

– high population growth and increasing government spending: (9%

By Country

 Growth in construction activity in the sector is underpinned by solid fundamentals

Awards 2009-2014


Awards 2015E-2020E

Saudi Arabia



Iraq 2% 7%




– Infrastructure development in underserved markets: primarily Egypt

and Algeria and Iraq (Egypt ranks 100 , Algeria 106 of 144 in infrastructure quality as per Global Competitiveness Report)

By Sector

growth by 2020, and a median age of 27.3) Chemical Power

Construction Transport

Industrial Water 3%






2020), and projects in Mecca and Medina to accommodate growing pilgrimage visitors Source: MEED Insight and MEED Projects; IMF

By Status

– Large spending programs for major global events (e.g. Dubai Expo Design



Main Contract Bid



Main Contract PQ





Growth Opportunities in Orascom Construction’s Core Markets (Cont’d)  Egypt’s infrastructure announcements focus on power and transport development at an investment cost of approximately US$27 billion and US$39 billion, respectively

North Africa

 There has been a substantial push towards a PPP approach for projects in Egypt, allowing the government to proceed with development plans and minimise project and performance risks  Noteworthy are $40 bn low-cost housing project as well as US$8.5bn Suez Canal expansion in Egypt  Algeria, historically a large market for the Group having completed nearly 40 project (since 2011)

Egypt has a pipeline of US$157 billion worth of construction projects through 2020 In Algeria, power projects comprise a critical component of the US$35 billion project pipeline through 2020(1)

 Five year public infrastructure development plan of US$262 billion

 Massive infrastructure pipeline in the region including 60,000MW power expansion in Saudi Arabia, $20 billion transportation projects in UAE

GCC & Levant

 The UAE has announced US$464 billion in projects through 2020 including high value developments such as Dubailand, Saadiyat Island and Capital District. Social and commercial construction projects comprise the largest share of the project pipeline for the UAE, the bulk of which is concentrated in Dubai  Despite the on-going instability in Iraq, announced projects through 2020 exceed US$100 billion. This value already excludes nearly US$51 billion worth of projects that were announced but have been put on-hold

 Total construction spending has returned to pre-economic crisis levels, and is expected to return to near record levels by 2018 United States

 The total non-residential market including federal infrastructure spending is estimated to grow approximately 5 per cent. each year through 2018 totalling nearly US$2.7 trillion, mainly driven by educational, commercial and manufacturing projects.

Source: MEED Insight and MEED Projects Note (1): Excluding Oil & Gas

With US$674 billion in projects planned through 2020, Saudi Arabia has the largest pipeline of planned infrastructure and industrial projects in the MENA region

United States construction spending outlook is expected to reach nearly US$4.6 trillion through 2018, supported by lower energy prices, generally low overall inflation, steady GDP growth 59