(DFM:TABREED) Investor Presentation - Brand...

NATIONAL CENTRAL COOLING COMPANY (PJSC)

Investor PresentationSeptember 2017

National Central Cooling Co. (DFM:TABREED)

Tabreed – September 2017 Investor Presentation2

• These materials have been prepared by and are the sole responsibility of theNational Central Cooling Company PJSC, ‘Tabreed’ (the “Company”). Thesematerials have been prepared solely for your information and for use at thecall/presentation. By attending the meeting/call where this presentation ismade, or by reading the presentation slides, you agree to be bound by thefollowing limitations

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• These materials are for information purposes only and do not constitute aprospectus, offering memorandum or offering circularor an offer to sell any securities and are not intended to providethe basis for any credit or any third party evaluation of any securities or anyoffering of them and should not be consideredas a recommendation that any investor should subscribe for or purchase anysecurities. The information contained herein has not been verified by theCompany, its advisers or any other personand is subject to change without notice and past performance isnot indicative of future results. The Company is under no obligation toupdate or keep current the information contained herein

• No person shall have any right of action (except in case of fraud) against theCompany or any other person in relation to the accuracy or completeness ofthe information contained herein. Whilst the Company has taken allreasonable steps to ensure the accuracy of all information, the Companycannot accept liability for any inaccuracies or omissions. All the informationis provided on an “as is” basis and without warranties, representations orconditions of any kind, either express or implied, and as such warranties,representation and conditions are hereby excluded to the maximum extentpermitted by law

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• These materials contain information regarding the past performance of the Companyand its subsidiaries. Such performance may not be representative of the entireperformance of the Company and its subsidiaries. Past performance is neither a guideto future returns nor to the future performance of the Company and its subsidiaries

• These materials contain, or may be deemed to contain, forward-looking statements.By their nature, forward- looking statements involve risks and uncertainties becausethey relate to events and depend on circumstances that may or may not occur in thefuture. The future results of the Company may vary from the results expressed in, orimplied by, the following forward looking statements, possibly to a material degree.Any investment in securities is subject to various risks, such risks should be carefullyconsidered by prospective investors before they make any investment decisions. Thedirectors disclaim any obligation to update their view of such risks and uncertaintiesor to publicly announce the result of any revision to the forward-looking statementsmade herein, except where it would be required to do so under applicable law

Disclaimer


A GCC wide environment-friendly company delivering shareholder returnsTabreed is ..

• A provider of a part of GCC’s critical infrastructure• Delivering and operating district cooling solutions with high reliability• Creating sustainable value for our shareholders• Providing uninterrupted service to our customers and maintaining the comfort of the communities we serve

We aim to be the partner of choice for Governments and Corporations across GCC in providing environmentally friendly cooling solutions

EFFICIENT AND ENVIRONMENT FRIENDLY OPERATIONS

We harness the most efficient technology and utilize our extensive experience to deliver reliable and energy

efficient cooling solutions that are environmentally friendly

SUSTAINABLE LONG-TERM SHAREHOLDER RETURNS

We generate sustainable long-term returns for our stakeholders on the back of the utility infrastructure

business model

REGIONAL LEADER

As the region's preferred provider of cooling solutions, we focus on our customers' needs and deliver

comfort, value and service to all the communities we serve


District Cooling Benefits

Overall cooling represents 70% of peak energy consumption…

District Cooling (DC) is 50% more energy efficient than Conventional Cooling (CC)…

DC has ~16% lower life cycle cost than CC

KW

h/R

Th

Other

District Cooling

Conventional Cooling

Industry

Variable

Capex

ChargedMonthly

Paid Upfront

13%

63%

7%

17%

70%

District Cooling leads to substantial energy, economic and environmental benefits

-50%

District coolingConventional cooling

49 45

51

39

Conventional cooling

District cooling

-16%

A cooling plant supplies chilled water via an underground piping network to more than one building in a service area (or district)

What is District Cooling

HEAT EXCHANGER


Tabreed at a glance

Environmentally responsible operations reducing green house gas emissions

annual reduction in energy consumption in the GCC through Tabreed’s DC services in 2016

Enough energy to power

Serving iconic projects across the region

48,000homes in the UAE every year

=

1.4 billion kWh 713,000 tons

annual elimination of CO2

emissions

=The equivalent of removing

143,000cars from our streets every year

Approaching

1.1m RT delivered to clients

One of the world’s largest district cooling companies

72plants in 5 countries

Equivalent to cooling

towers the size of Burj Khalifa108

DubaiMetro

ClevelandClinic Abu Dhabi

Jabal Omar Project

Sheikh Zayed Grand Mosque

Dubai Parks and Resorts

Etihad Towers


The only listed DC Company and operating across the region5 GCC Countries | 72 Plants | Approaching 1.1m tons of cooling

Bahrain26k RTDiplomatic Area - 1

Qatar196k RTWest Bay – 2Pearl - 1

KSA77k RTAramco - 1Jabal Omar -1

Oman16k RT

KOM - 1Lulu – 1

Remal Castle - 1

UAE769k RTAbu Dhabi – 38Dubai –18Northern Emirates – 7

• Partnership with ACWA Holding and others

• Owns and operates first significant DC plant in KSA – Saudi Aramco (32 kRT)

• Also owns and operates a DC plant in the Holy City of Mecca for Jabal Omar Development Co. (45 kRT)

• Operates the DC plant servicing the landmark KAFD development (50 kRT)

Landmark Projects: Saudi Aramco, Jabal Omar Development

Saudi Tabreed District Cooling Company (Tabreed 25%)

• A partnership between Tabreed and prominent Omani pension funds• Owns and operates 3 plants serving Knowledge Oasis Muscat, Oman Avenues Mall and Remal Castle (added during

Q2 2017)Landmark Projects: Knowledge Oasis Muscat and Oman Avenues Mall

Tabreed Oman (Tabreed 60%)

• Owns and operates 1 DC plant (26 kRT)

• Plant runs using sea water to provide cooling to the most prestigious developments in Bahrain

Landmark Projects: Reef Island, Financial Harbour, World Trade Centre

Bahrain District Cooling Company (Tabreed 90%)

• Joint Venture with United Development Company

• Owns and operates the world’s largest 130 kRT DC plant on The Pearl (109 kRT)

• Also owns and operates 2 DC plants and a concession in Qatar’s West Bay (87 kRT)

Landmark Projects: The Pearl – Qatar, West Bay

Qatar District Cooling Company (Tabreed 44%)

• 59 consolidated plants, 4 held through associates and joint ventures

• Plants in 6 emirates of the UAE - Abu Dhabi, Dubai, Ajman, RAK, Sharjah and Fujairah

• 769 kRT delivered to clients including some of UAE’s most prominent landmarks

Landmark Projects: Dubai Metro, Dubai Parks and Resorts, Sheikh Zayed Grand Mosque, Yas Island, Al Maryah Island

National Central Cooling Company and its UAE investments

• Only listed DC company in GCC markets

• Uniform utility infrastructure model implemented across GCC

• Long term contracts underpinning stability of earnings and returns for shareholders

Capacity (kRT) UAE Qatar KSA Bahrain Oman Total

Consolidated 667 - - 26 16 709

Equity Accounted 102 196 77 - - 375

Total 769 196 77 26 16 1,084


Utility business model with fixed revenue providing ~92% of returns

• Capacity charges reflect the cooling capacity reserved for the customer

• Consumption charges recover the cost of cooling consumed and is billed based on metering

• Consumption billing follows a bell curve in line with average temperatures in the region

• Capacity bills are a fixed amount every month

• Blended EBITDA margin is the highest in the winter months, average 49% for the year

• Consumption revenue covers all variable costs of operation

• Capacity revenue covers fixed O&M, finance and corporate costs and provides return on capital

64%

36%

Capacity Consumption

59%

45% 43%

55%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Capacity Consumption EBITDA Margin

64%

37%

92%

36%

63%

8%

Revenue Costs andOverheads

Total EBITDA

Capacity Consumption

Capacity Charges

Consumption Charges

Contracted cooling load (RT)FIXED

Cooling consumed (RTh)VARIABLE (METERED)

Majority of revenue comes from capacity charges

Capacity revenue is fixed for the year while consumption revenue

varies

Consumption is a pass through and capacity provides returns

25 year contract

Index



C | Board of Directors and Senior Management

D | Financial Performance


F | Conclusion


A successful turnaround story - Tabreed’s journey so far• Tabreed was incorporated in 1998 and was listed on the DFM upon its formation

• Key customers agreements were signed in the first seven years with UAE Armed Forces and Aldar

• The 2008 financial crisis led to recapitalization in 2011 and since then Tabreed has :

• Adopted a new utility business model focusing on chilled water segment

• Signed firm off-take contracts with credit-worthy and quality customers and expanded its geographical footprint

• Tabreed of today employees over 1000 staff and has 72 plants in 5 GCC countries providing the infrastructure for the region’ssustainable development while providing sustainable returns to its shareholders

1998

The UAE Offset Programsowed the seeds of Tabreed

• Signed anagreement to supplythe UAEAF

• Listedonthe DFM

2000

2005

2006-2008 2011

2012

2014

Signed an agreement with Aldar and the RTA

• Issued Mandatory convertible bond of AED 1.7 billion

• Rapidly expanded in 4 other GCC countries

2009

Recorded a loss of over AED 1.2 billion due to economic slowdown;Management changed

Closed UAE’sFirstCommercialRecapitalization Program; Mubadalainjects AED 3.1bn

NIof AED 236 million, build-outprogram complete

• Completed refinancing

• Signed agreement with Meraas

• Acquired Al Maryah Island plant

• Renewed contract with UAE-AF

Connected Capacity (RT) 2000 2005 2010 2016 2017

Group Capacity 2,000 97,000 597,000 1,048,000 1,084,000

UAE Capacity 2,000 97,000 477,000 746,000 769,000

2015

• MCB repurchase• Renewed Aldar agreement• 20% increase in dividends

2017

• New AED 1.5 bn Islamic Financing

• Conversion of MCBs issued to Mubadala

• Engie made strategic investment in Tabreed; acquired 40% stake


Long term contracts with credit-worthy customers

• UAE Armed Forces was the first customer of the Company and continues to be an important partner

• Tabreed cools multiple military and training facilities

• Cooling agreement was renewed in 2014 for another 20 years

• Roads and Transport Authority of Dubai (RTA) is responsible for transport, roads & traffic in the Emirate of Dubai

• Tabreed has been providing cooling to all metro stations of the iconic Dubai Metro project since 2009

• Long term 27 year contract

• Aldar Properties PJSC is the leading real estate developer in Abu Dhabi and listed on ADX

• Tabreed and Aldar have been in partnership since Aldar’s incorporation in 2005

• Providing cooling to Aldar’s developments on Yas Island, Al Raha Beach, Reem Island and Abu Dhabi Island

• Cooling agreement was renewed in 2015 for another 30 years

Owned and Consolidated Plants

Joint Ventures and Associates

Tabreed’s UAE joint ventures and associates have long term contracts with key Government clients such as Mubadala,

Cleveland Clinic Abu Dhabi, Abu Dhabi Global Market Square, ZonesCorp et al while also serving reputable private

customers such as Aldar and Al Hilal Bank

Our joint ventures and associates also provide cooling to key Government clients such as Saudi Aramco, King Abdullah

Financial District and King Khalid International Airport. Also serve reputable private customers such as United

Development Company in Qatar and Lulu in Oman

The top 3 customers accounted for ~60% of chilled water revenues in 2016


Guaranteed and price certain contracts provide stability of future earnings

• Tabreed’s average initial contract length is over 25 years

• It is expected that contracts will be renewed at or before expiry:

• Useful life of plant, equipment and network is expected to exceed contract terms

• No viable or economical alternative is available for customers whose developments have been designed for DC

• Tabreed has recently renewed and extended contracts with key customers making up over 45% of capacity revenues

Long term contracts and utility business model lead to stable, consistent and recurring revenues

Over 96% of capacity revenue is locked in for the next 10 years and Management’s target is to renew contracts on or before theirexpiry

100% 100% 100% 99% 99% 99% 99% 98%97% 96% 96%

50%

60%

70%

80%

90%

100%

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Consolidated capacity Revenue contribution (no CPI)


Pursuing growth opportunities across GCC

Well placed to benefit from growth opportunities in the region through a mix of existing concessions and assets and new plants

• Over 60kRT of fully contracted capacity to be connected by end of 2018 in UAE, Qatar, Saudi, Bahrain and Oman and 36kRT

added by the end of H1 2017

• Tabreed is also positioned to benefit from several captive concession-like arrangements with customers across the region

Concessions

Concession-like arrangements

leading to captive growth

New plants

New plants and developments with

take-or-pay contracts

Existing plants

72 plants across the region provide

opportunity for new connections

Connections to existing plants, high margin and increasing utilization

• Tabreed has added around 50kRTto existing plants since 2011

• Usually requires no additional fixed cost and provides higher margins

• Possible additions in the future could be up to 5% of total capacity

New plants, driven by the real estate market

• 3 plants under construction in the GCC (1 each in Oman, Qatar and UAE)

• Major projects include King Khaled International Airport (15kRT), West Bay 3 in Qatar (15kRT) and other projects in Oman

Concession-like arrangements, providing captive growth from key customers

• Various arrangements across the GCC providing captive growth

• UAE – Yas Island, Maryah Island, Raha Beach, Dubai Parks

• Qatar – Pearl Qatar

• KSA – Jabal Omar development

• Bahrain – Reef Island and Bahrain Financial Harbor


19 years experience of building, operating and maintaining plantsTabreed’s in-house team has been successful in designing, building, operating and maintaining some of the biggest District Cooling systems across the region for over 19 years

Corporate19%

Operational33%Maintenance

22%

Building Maintenance

26%

O&M STRATEGY

Operate and maintain plants and facilities to provide a consistently high level of service efficiently while preserving the value of the assets

Proven operations track record

• In-house operation of all plants since 1998• Less than 1% unscheduled downtime and no major outage or supply

interruption in 19 years of operations• Strong operating track record underpinned by comprehensive

maintenance plans and critical equipment redundancy• Recognized as a regional leader and contracted by 3rd parties to manage

their plants and facilities

24/7 manned operations

• Operators present at plants at all times• Regular operational and HSE training and development programs for

operators• Integrated control and monitoring of all major equipment in plants using

SCADA• Recently launched optimization project to reduce power consumption and

enhance plant performance

Centralized maintenance

• Experienced in-house maintenance teams to serve all plants• Operations and maintenance is fully integrated into the business strategy• Rigorous predictive and preventive maintenance schedule with a lifecycle

view• Stand-by team on hand to address any unplanned maintenance needs• Emergency and recovery plans in place to deal with any outages• In house building maintenance team to support certain customer side

cooling infrastructure

Project design and delivery

• Joint venture with SNC Lavalin to provide EPC expertise. JV has so far constructed more than 60 plants for Tabreed and third parties

• Experienced in-house project management team to manage delivery of projects

• Designed complex systems specific to customer needs such as Dubai Metro, Yas Island, Dubai Parks and others

Headcount Plant Performance

0.0

Availability

99.4%

Major outage

Cost Breakdown

778Employees

EBITDA split % of RevenueVariable cost (76% electricity) 32%Plant Operations 4%Plant Maintenance 4%Total Operational Cost 40%Corporate overheads and others 11%Total Costs 51%

EBITDA 49%


Focus on Health, Safety and EnvironmentHealth, safety and environment is a cornerstone of our operations and an integral part of business planning and strategic goal setting.

• Integrating HSE into plant operations and processes

• Development of Tabreed’s HSE manual

• Regular HSE training and awareness programs to enhance HSE readiness

• All Tabreed and most contractor employees have been trained over the past 2 years

• Regular internal and external HSE audits to ensure compliance with UAE regulations and international standards

• HSE tracking system for effective monitoring of HSE performance and objectives

Implementation

• Recipient of International Organization for Standardization and British Standard Institute certifications• ISO 9001 for quality

management systems• ISO 14001 for

environment management systems

• OHSAS 18001 for occupational health and safety management systems

Certifications

• Senior management is fully committed to HSE with direct reporting line to the CEO

• Reporting HSE performance to the Board of Directors on monthly basis

• HSE steering committee comprises HSE, Operations and Internal Audit heads

• Multiple plant and site visits performed each year by CEO and senior management

Leadership & Commitment

• Conduct business in socially responsible manner

• HSE is a key consideration in business planning and decisions

• Comply with all regulations and industry best practices

• Ensure all employees are trained and motivated to adopt and develop HSE culture

• Seek continuous improvement in HSE performance

HSE Policy

Index






F | Conclusion


Board of Directors and Senior ManagementExperienced Board and Management with diverse industry experience

Jasim Husain ThabetChief Executive Officer

• Currently Chief Executive Officer, Aerospace, ICT and Renewables

• Managing Director of Abu Dhabi Racing

• Board member of Masdar, Emirates Global Aluminum, Abu Dhabi Motorsports Management, Mubadala Petroleum, GLOBALFOUNDRIES, Finance House and Cleveland Clinic Abu Dhabi LLC

• Board member of Saudi Tabreedand Qatar Cool

• Joined Tabreed in August 2012

• Over 15 years of experience in the regional energy, infrastructure and utilities industries, including the district cooling sector

• Prior to joining Tabreed, Jasim was Vice-President in Mubadala Development Company’s Industry Unit, with responsibility for managing several of the Unit’s key assets

• Also held senior positions with General Electric Power Systems, and ZADCO, one of the region’s leading oil producers

Khaled Abdulla Al QubaisiChairman

Board Member Background

H.E. Dr Ahmad Abdulla Belhoul• Minister of State, Higher Education Affairs, Abu

Dhabi

Mohamed Jameel Al Ramahi • CEO, Masdar

Mohammed Al Huraimel Al Shamsi

• Senior Vice President in the Industry Unit, Mubadala

Saeed Ali Khalfan Al Dhaheri • Investments Director at Ali & Sons, UAE

Paulo Almirante • Executive Vice President, ENGIE Group

Sébastien Arbola• CEO, ENGIE Middle East, South & Central Asia

and Turkey

Frédérique Dufresnoy• Deputy Director Métier Business to Territories,

ENGIE Group

Frederic Claux• Head of Acquisitions, Investments and Financial

Advisory, ENGIE Group

Executive Management Background

Stephen RidlingtonChief Financial Officer

• Over 20 years with BP in several senior finance roles including Deputy CFO and Group Treasurer of TNK-BP

Hamish JoosteChief Legal Counsel

• Over 17 years of experience in corporate law, mergers and acquisitions, private equity and project finance

Index






F | Conclusion


Consolidated Income Statement (AEDm) 2016

Revenue 1,280

Operating cost (682)

Gross Profit 598

Administrative and other expenses (193)

Profit from Operations 405

Net finance costs (156)

Other gains and losses 1

Share of results of associates and joint ventures 117

Net Profit 367

• Tabreed consolidates companies it controls (generally >50% ownership) while the rest are equity accounted

• Equity accounted companies include : Qatar Cool, Tabreed Saudi, Al Maryah plant, S&T Cool, Sahara Cooling

• Tabreed is split in to two business segments

• Chilled water: Companies providing district cooling services in UAE, Oman and Bahrain

• Value chain business: Non-core companies engaged in pipe manufacturing, chemical supply and consulting in the UAE

• Chilled water makes up 95% of total revenues, EBITDA, and Net Income

• While value chain businesses are profitable, they contribute less than 4% to Tabreed’s Net Income and EBITDA

Tabreed Consolidated

Consolidated companies

Chilled WaterTabreed’s 53 plants owned in UAE and

3 plants in Bahrain and Oman

Value ChainNon-core companies engaged in

manufacturing and consulting

Equity accounted investments

Chilled water investments in UAE (9 plants), Qatar (3 plants) and Saudi (2

plants) and SNC JV

Structure of Tabreed’s financial

statements

Tabreed’s Financial Statements


Core Chilled Water business drives performance growth

Capacity (kRT) Chilled Water Revenue and Share of results (AED m)

Chilled Water Profit From Operations (AED m)

UAE Qatar KSA Other GCC

Total

Revenue 1,119 - - 49 1,168

Operating Costs (580) - - (37) (617)

Gross Profit 540 - - 11 551

Gross Profit Margin 48% - - 22% 47%

Profit from Operations

382 - - 5 387

OP Margin 34% - - 10% 33%

Share of Results of Associates

37 45 35 - 116

1,103

2014

1,035

2013

1,027

2016

1,168

+4% p.a.

2015

Equity accountedConsolidated

348 359 370 387

+4% p.a.

2015

34%

2014

35%

2013

32% 33%

2016

Profit from OperationsMargin

UAE is the foundation for consistent performance with exciting opportunities in GCC beginning to materialize

Chilled Water Geographical Breakdown (AED m)

638

2014

638

2013

616

+4% p.a.

2016

683

2015

+22% p.a.

2015

336

2014

319

2013

201

2016

365

+21% p.a.

2016

117

20152014

85

2013

66

99

Share of ResultsCW Revenue


Headline Performance

Stable utility infrastructure business with strong cash flows that continues to deliver earnings and dividend growth

H1 2015

507

H1 2014 H1 2016

639555 37

602

6348

516

+7% p.a.

526

H1 2017

483

43

579

H1 2017

1,084

344

730636

+5% p.a.

354

H1 2016

980

H1 2014

926

612 641

314

953

H1 2015

312

UAE Govt

Revenue growth from existing and

new business

• Utility business model leads to steady increases in revenue and profitability

• Total Group Revenue up 10%, reaching AED 639m, driven by new capacity additions

• Chilled Water revenue up 17% due to a 10% increase in consolidated capacity

combined with impact of utility tariff and CPI pass through

Profitability and value to

shareholders

Strong operating performance and financial position

• Predictability in earnings driven by capacity charge

• Net income and EBITDA have grown at 9% and 6% annually since 2014

• Increasing profitability driven by economies of scale and cost control

• Net income and EBITDA up 20% and 12%, respectively in H1 2017

Long-term contracts with credit worthy

customers

• Providing over 1.1m RT of cooling across GCC– growing 5% annually since 2014

• Consolidated capacity increase of 10% and equity accounted capacity of 11% y-o-y

• Long term price certain contracts (~25 years) ensuring stability in earnings

• ~46% of UAE capacity contracted with Government clients

Fin

anci

al R

esu

lts

(AED

m)

Gro

up

Rev

enu

e (A

EDm

)G

rou

p C

on

nec

ted

Cap

acit

y (k

RT)

Chilled Water Value Chain

308

211

+9% p.a.

193

264

160178

259

179149

275

186153

H1 2014 H1 2017H1 2015 H1 2016

Profit from Ops Net IncomeEBITDA

30%

48%

44%45%

48%

Net Income Margin28%

Gearing

Operating ProfitMargin

33%

EBITDA Margin

32%

20162017

• Longstanding track record of dividend payment

• EBITDA margin steady at 48% in 1H 2017

• Net Profit margin improved by over 2% y-o-y to 30% in 1H 2017

• New Islamic financing to further strengthen capital structure


Index






F | Conclusion


Conversion of MCBs and strategic investment from Engie

The transaction

How it benefits Tabreed?

• Tabreed gains a global industry player as a key long term strategic shareholder

• Mubadala has reiterated its commitment to the company and remains the majority shareholder

• Conversion of MCBs leads to over AED 150m of cash flows savings by 2019 and a simplified capital structure

• Tabreed aims to leverage ENGIE’s global business development and operations expertise to further accelerate growth and

development

Who is ENGIE?

• ENGIE is a global energy leader with over $30 billion market cap, over 155,000 employees and operations in 70 countries

• Headquartered in Paris, ENGIE key business ventures are in power, natural gas and energy services (including district cooling).

They have a strong footprint in the region with over 30GW of electricity assets alone

• ENGIE is already a leader in district energy with operations in Europe and South East Asia

Free cash flow upside post conversion

• Tabreed has been reporting all numbers on a fully diluted basis (such as EPS) and paying

dividend on the fully diluted shares

• After an early conversion, annual MCB coupon of AED 86m would not be paid post conversion

and represents 3 fils per share of cash flows savings

• Last coupon was paid in July for Q2 2017

• Mubadala became the majority shareholder of Tabreed in 2011 after the recapitalization, investing

AED 3.1bn in the company

• Tabreed has successfully completed its turn around into a profitable utility infrastructure business

and is now well positioned for future growth

• All MCBs issued to Mubadala were converted into 1,977m shares on 16 August 2017 taking total

shares outstanding to 2,715m

• Engie acquired 1,086m shares or 40% of Tabreed from Mubadala value of AED 2.62 per share

42% 40%

18%

Float

Tabreed’s ownership after completion

9%

Coupon

Total

6%

4%

Dividend

Annual coupon cost saving


Capital Structure – As at 31st August, 2017

Robust capital structure with sustainable leverage ratios

Equity & Liabilities

31%

Bank Debt

Share Cap.

Other liabilities

Reserves

AED 8.8 bn

24%

88%

14%

9%12%

Islamic Financing

22%

Assets

Cu

rren

tas

sets

No

n-c

urr

ent

asse

ts

Equ

ity

(53

%)

Liab

iliti

es

(47

%)

• AED 1.7bn of syndicated bank loan for Tabreed UAE• Includes AED 185m of overseas subsidiaries debt, Bahrain and Oman• Also includes AED 265m of non-recourse project finance debt• See following slide

• Retained earnings, statutory and other reserves

• Common share capital (2,716m shares; 42% Mubadala, 40% Kahrabel Fze, (Engie))

• Includes routine Accounts payable and accruals • Also includes capex payable to contractors

Other Liabilities

Bank Debt

Reserves

Issued Capital

• AED 1.5 bn refinancing of existing bank debt via a receivables-based financing

• Lighter covenants and extended tenor at a similar cost

Islamic Financing


Debt portfolio; New Islamic Financing improves financial flexibility

• Management’s strategy has been to match debt tenors to asset life

• During Q2, Tabreed refinanced AED 1bn of existing corporate debt via a receivables-based contract financing whilst securing AED 500m of additional debt capacity in the process

• New financing provides greater financial flexibility as a result of lighter covenants and extended tenor at a similar cost ofcurrent corporate debt

• Sharia compliant loan funded by Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank, and Mashreq Al Islami

• Initial tenor of 10 years

• Reduces refinancing risk on corporate debt by removing AED 800m from the 2021 bullet

Tranche Main purposeDrawn Amount

(AED m)Undrawn Amount

(AED m)Maturity

Tranche 1 Refinance current debt 1,025 - 2027

Tranche 2 Current capex tranche – to fund ongoing investment 195 - 2027

Tranche 3 Future capex tranche – to fund future investments - 293 2027

Total debt 1,220 293

AED 1.5bn refinancing with

AED 500m of new debt capacity

Borrower TypeDrawn Amount

(AED m)Undrawn Amount

(AED m)Currency Interest Hedging (%) Maturity

Tabreed Term loan 1,680 - AED EIBOR + margin 98 2021

Tabreed Revolver 58 392 AED EIBOR + margin - 2021

Tabreed Islamic Financing* 1220 293 AED EIBOR + margin - 2027

Dubai Parks SPV Project Finance 187 10 AED EIBOR + margin 61 2032

ICT SPV Project Finance 78 - AED EIBOR + margin 75 2031

Bahrain DC Company Term loan 120 - USD LIBOR + margin - 2019

Tabreed Oman Term loan 65 9 OR Fixed margin 100 2024

Total debt 3,408 704 55%

Debt position as at 31st August 2017

* This facility is expected to be hedged 60% by the end of the year


Index






F | Conclusion


Unique GCC-wide infrastructure assets company

Why Tabreed

• One of the largest district cooling companies in the world with experienced management team

• 19 year track record of excellent operational performance, on-time delivery of projects and expertise in financing DC assets

• Relationships with Government and key real estate developers across the region

• A strong shareholder base with Mubadala and ENGIE providing support and operations growth

Seeking and investing in

opportunities across GCC

• Focus on stable Chilled Water leading to enhanced value from existing plants and increasing operational efficiencies

• Seeking and investing in organic and inorganic projects across the GCC

• De-risking projects by using “take or pay” fixed date contracts and ring-fenced project financing

Robust Financial Results

• Sustainable, stable and predictable results, low operating risk business model with strong margins

• Double digit growth in EBITDA and Net Income since 2012, driven by capacity additions and CPI pass through

• Strong cash generating ability, EBTIDA growing at 6% annually

Why District Cooling

Track record of delivering

capacity growth

• 158kRT capacity added since H1 2014

• 60kRT of signed up capacity additions expected by 2018, 36kRT delivered in H1 2017

• Regional footprint allows access to varied growth opportunities

• Operational track record, customer relationships and financial strength to benefit from growth in the region

• District Cooling is a critical part of the growing GCC infrastructure

• District Cooling is 50% more efficient in consuming electricity than conventional cooling reducing energy consumption, carbon

footprint, and state subsidies while also being 16% cheaper for the customer


Tabreed’s turnaround has been recognized by market players and has increased shareholder value

Shareholder Returns

• 5 consecutive years of dividend distribution beginning in 2012; 2016 dividend payout of 6.5 fils/share

• Share price beating DFM and MSCI Emerging Markets index since 2016

• A strong shareholder base with Mubadala and ENGIE providing support and operations growth

Solid performance vs

DFM index

Cash dividend yield (% of 31 December share price)2014 to date – Market price of Tabreed, DFM, ADX and MSCI Emerging Markets

Mubadala, 42%Engie, 40%

Other Institutions,

12%Retail, 6%

UAE, 91%

GCC, 3%

Arab, 1%

Other, 5%

Shareholder Composition and Geographical Spread

0

10

20

30

40

50

60

70

80

90

0.0

0.5

1.0

1.5

2.0

2.5

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Vo

lum

es (

Mill

ion

)

Ind

exed

to

Tab

reed

pri

ce (

AED

)

Volume Tabreed DFM MSCI-EM

4.1%

2.1%

4.6%5.0%

3.2%

2012 2013 2014 2015 2016

NATIONAL CENTRAL COOLING COMPANY (PJSC)

Management looks forward to engaging with shareholders and investors at the following events

Third quarter earnings call End of October 2017

EFG MENA & Frontier conference, London 6 – 9 November 2017

BAML MENA conference, Dubai 15 – 16 November 2017

Year end earnings call End of January 2018

Contact us

Saket Somani Churchgate Partners

Tel: +971 4 3132432Email: [email protected]

Richard RoseVP – Finance

Leila Al Marashi VP – Corporate Communications




APPENDICES


Engie – A global energy leader

History

• ENGIE Group was formed by merger between many of the biggest names in European industry over a period of more than 180

years

• Companies merged over years include Société Générale de Belgique, Compagnie Universelle du Canal Maritime de Suez, Société

Lyonnaise des Eaux et de l’Éclairage, Gaz de France (GDF) and International Power

Key Highlights

• Operations in over 70 countries across the world; #1 producer of non-nuclear power in the world

• 112.7 GW of installed power production capacity across the world; #1 independent power producer

• 343 exploration and/or production licenses across 13 countries; #1 importer of LNG in Europe and #5 in world

• 19.5 GW of installed power production capacity in renewable energy; 8.1 GW under construction

• #2 natural gas transport and #1 natural gas distribution networks in Europe

• #1 supplier of energy efficiency services in the world

• 228 district cooling and heating networks in 13 countries

• €70 billion in revenues

• €16 billion of growth investment over 2016-2018

Overview

• ENGIE group has a strong presence at every link in energy value chain, from low-carbon generation to the provision of energy-

efficient solutions for all its customers

• ENGIE is focused on its 3 core businesses of Electricity, Natural Gas and Energy Services to support and develop a new vision of

energy for the world: sustainable energy available to everyone


Stable core business model delivering consistent performance

Capacity (fixed) Consumption (variable)

Total

Revenue, net of amortization 64 36 100

Utility Costs - (32) (32)

Plant operation & maintenance (9) - (9)

Depreciation (11) - (11)

Gross Profit 44 4 48

Corporate overheads (16) - (16)

Profit from Operations 28 4 32

Add back: depreciation & amortisation 16 - 16

EBITDA 44 4 48

68% 12% 48%

Profit Statement (% of revenue) – based on 2016 results

64% of the revenue is

fixed

Stable and predictable earnings - 91% of EBITDA arises from capacity charges

• Tabreed bills customers for capacity (fixed) charges and consumption (variable) charges

• Capacity charges reflect the cooling capacity (in RT) reserved for the customer and are

generally fixed, subject to escalation based on country CPI every year

• Consumption charges recover the cost of cooling consumed. Contractually, any change in

variable cost is generally passed through to the customers

• Tabreed’s EBITDA is driven by capacity charges allowing recovery of plant operation cost,

corporate overheads and providing a strong return on capital invested

Billing structure and profitability

36%64%

ConsumptionCapacity

61%39%

9%91%

Only 39% of the cost is

against fixed revenue,

rest is passed through

Hence, 91% of the

EBITDA is from capacity

revenue


Income Statement

Key Observations

Stable utility infrastructure business model enables consistent performance with ~50% EBITDA margins

Consolidated Financials (AED m) H1 2017 H1 2016 Variance % Revenue 639 579 61 +10%

Chilled water revenue (94%) 602 516 86 +17%Value chain businesses (6%) 37 63 (26) -41%

Operating cost (327) (295) (31) +11%Gross Profit 313 283 29 +10%Gross profit margin 49% 49%Administrative and other expenses (101) (97) (4) +4%Profit from Operations 211 186 25 +14%Operating profit margin 33% 32%Net finance costs (82) (75) (7) +10%Other gains and losses 1 4 (3) -71%Share of results of associates and joint ventures 62 48 14 +29%Income attributable to non-controlling interests (0) (3) 3 -92%Net Profit 193 160 32 +20%Net profit margin 30% 28%EBITDA 308 275 33 +12%EBITDA margin 48% 48%

• Revenue growth of 10% in H1 2017 reflecting capacity additions

• Net profit increase is driven by 17% increase in the chilled water segment

• Higher finance cost primarily reflects increase in EIBOR rates partly offset by portfolio hedge to fixed rates

• Associates and JVs continue to perform well with a 29% increase in share of results

• Gross margins remained stable, consistent with utility business model


Key Observations

• Higher cash balance primarily due to strong operating cash flows and increase in gross debt as existing corporate debt was

refinanced:

o AED 1,334m of new debt, largely reflecting drawdown on a new Islamic Financing of AED 1,220m

o AED 1,116m of repayments reflecting AED 945m repayment of existing corporate debt and scheduled debt repayments

• Increase in accounts receivables primarily due to short term timing delays in customer collection which was rectified in July 2017

Balance sheet continues to show strength and positions Tabreed to finance further growth

Consolidated Financials (AED m) Jun 30, 2017 Dec 31, 2016 Variance %

Fixed Assets 6,937 6,977 (39) -1%

Investments in associates and JVs 831 826 5 +1%

Accounts Receivable 523 409 114 +28%

Cash and Short Term Deposits 500 390 110 +28%

Other Assets 62 60 3 +5%

Total Assets 8,854 8,661 193 2%

Equity and Reserves 2,660 2,666 (5) -0%

Convertible bonds - equity component 1,773 1,773 - +0%

Debt 3,610 3,424 186 +5%

Other Liabilities 811 799 12 +1%

Total Liabilities and Equity 8,854 8,661 193 2%

Financial Position


Key Observations

• Operating cash generation remains strong due to higher profitability

• Capital expenditure included AED 100m paid to ICT for the acquisition of Nation Towers plant

• Healthy cash balance of AED 500m at the end of Q2 2017

Strong cash flow generation from long term price certain contracts enabling investment in growth

Consolidated Financials (AED m) H1 2017 H1 2016 Variance %

Profit from Operations 211 186 25 +14%

Finance lease amortization 28 28 0 +0%

Depreciation 69 62 7 +12%

Working Capital and Other adjustments (25) (17) (8) +45%

Net cash flows from Operating Activities 283 258 25 +10%

Capital expenditure incurred (154) (121) (34) +28%

Investments in JVs - (92) 92 -100%

Dividends and interest income received 54 47 7 +100%

Proceeds from land sale in Oman - 12 (12) -100%

Net cash flows from Investing Activities (101) (154) 54 -35%

Loans drawn down 114 289 (176) -61%

Principal and interest payments on loans (1,189) (167) (1,022) +614%

Islamic financing arrangement received 1,220 - 1,220 +100%

MCB cash coupon paid (22) (43) 22 -50%

Others (195) (172) (24) +14%

Net cash flows from Financing Activities (72) (92) 20 -22%

Net Movement in Cash and Cash Equivalents 110 12 99 +850%

Cash and Cash Equivalents at the start of the period 390 193 197 +102%

Cash and Cash Equivalents at 30 June 500 205 295 +144%

Cash Flow Statement

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