IRSA Inversiones y Representaciones Sociedad Anónima : Institutional Presentation | IVQ 2020

Institutional Presentation

FY 2020

IRSA AT A GLANCE

LEADING DIVERSIFIED REAL ESTATE		UNIQUE PORTFOLIO AND STRONG		INVESTMENTS IN THE US AND
COMPANY		MARKET POSITION IN ARGENTINA		ISRAEL

MARKET POSITION

ARGENTINA

ISRAEL

BUSINESS CENTER

BUSINESS CENTER

80.7%

HOTELS

LANDBANK

29.9%

18.9%

100%

83.7%

Indirectly

Directly and Indirectly

2

*CRESUD additionally owns 2.6% of IRCP shares

62.4%

Argentina Business Center

3

SHOPPING MALLS'	ATOMIZED AND DIVERSE TENANT MIX
UNIQUE PORTFOLIO	With low incidence of department stores
TOP FIVE ON SALES		SALES BY TYPE
	6.7%	17.3%	Others
		19,5%
			Department Store
				5,4%
	93.3%	82.7%		10,8%	56,2%
		Restaurants
				8,1%
	BY BASE RENT	BY SQM		Electro	Apparel
				BA CITY	~70%
					Market
					Share
15 MALLS
332,000 sqm GLA
				High income Area	4
				Mid Income Area
				Low Income Area

Dot Building

Philips

Zetta

OFFICES BUILDINGS

Boston Tower	200 Della
Paolera
	(IVQ FY20)

Bouchard 710

SuipachaRepública

Intercontinental

Expanding Corporate North Area Business Center

AAA Location

Back Office Center

8 BUILDINGS 121,000 sqm GLA

PREMIUM PORTFOLIO

Surface by class

A+ & A 84%

16% B

PREMIUM TENANTS

Others Technology

31%	75%
46%
	International
14%	Tenants

9%

Oil & Energy

Banks & Insurance

Intercontinental

3 PREMIUM HOTELS ACROSS THE COUNTRY

Libertador

Llao Llao

Intercontinental

Libertador

Llao Llao Resort

BA city	BA city	Bariloche city
313 rooms	200 rooms	205 rooms

RENTAL PROPERTIES´ RESILIENT REVENUE MODEL

FOR BOT H S HOP P IN G M A L L S A N D OF F ICE AGRE E M E N TS

SHOPPING MALLS

OFFICES

ARS

Variable

Base Rent

Base Rent

Fixed

Key money Base Rent

Brokerage fee

In advance

YEAR 1

YEAR 2

YEAR 3

USD

Per sqm	Per sqm	Per sqm

YEAR 1

YEAR 2

YEAR 3

VARIABLE & FIXED RENT

The company collects the highest between a % of tenant monthly sales and a minimum fixed rent (base rent)

50% Fixed

74%

of total

revenues

OTHER REVENUES

26% of total revenues comes from key money, brokerage fee, stands, parking and non-traditional advertising

OFFICE AGREEMENTS

• 3-yearaverage term
• US Dollar based
• Rental rates for renewed terms are negotiated at market

24% Variable

conditions	7

SHOPPING MALLS

OFFICE BUILDINGS

HOTELS

EXPENSES

CAPEX

COVID-19 IN ARGENTINA

IM PACT IN OUR BUSIN ESS

Operations closed since March 20th. The company decided to defer billing and collection of base rent and commercial fund from April to September 30, 2020, supporting tenants and prioritizing long-term relationship. We just charged common expenses.

Normal revenues collection during

lockdown period.

Shutted down since March 20th. Intercontinental Hotel just working under a contingency and emergency plan

Cut of nonessential expenses and services.

Cut of social security taxes and other taxes.

Construction works in Catalinas ("200 Della Paolera") and Alto

Palermo expansion suspended during lockdown. After the end of

the Fiscal Year, construction activity has been reestablished but

with some restrictions.

		Common Expenses;
		20%
		Commercial fund; 8%
		Parking y Otros; 9%
		Key money ; 9%
		Variable rent; 21%
GUARANTEED BY
	Base rent; 33%
CONTRACT
	Situation pre Covid-19
		(6M FY20)

Working together with our tenants giving them all our support and help in this unprecedented

situation

8

SHOPPING MALLS

OP E RAT IN G FIGURES

GLA & OCCUPANCY

(GLA: sqm)	Pre COVID-19
	95.0%

SAME SHOPPING MALLS SALES	Pre COVID-19	COVID-19
(% Var i.a.)

98.5%

94.7%93.2%

IIIQ20 Includes 10

days and IVQ the

full impact from

closure of

operations

344,025	332,150	333,062
		end of
		concession
	FY18			FY19		FY20

SHOPPING MALLS - DELINQUENCY

(ARS MILLION)

	9M 20	IVQ 20	FY 20	FY 19	∆
Delinquency	118	187	305	109	180%
Revenues	5,632	303	5,935	8,541	-30.5%
Delinquency/	2.1%	61.7%	5.1%	1.3%	+3.8bps
Revenues

																										60,5%
																										46,2%
																										35,1%
																																				32,5%
																						29,6%
											27,3%			28,7%
	18,3%			22,3%			22,7%											24,4%		24,7%
																																					5,6%
					2,8%
											1,6%				1,2%
							-0,1%
	-2,1%
																												-5,1%
																		-8,1%
																					-15,5%						-13,5%										-11,9%
																						-14,7%
																													Nominal terms
																													Real terms
																																									-90,4%
																																								-92,9%
	IVQ 17 IQ 18		IIQ 18		IIIQ 18		IVQ 18 IQ 19		IIQ 19 IIIQ 19 IVQ 19 IQ 20 IIQ 20		IIIQ 20 IVQ 20

9

COVID-19 MALLS´ REOPENING

ACCORD IN G TO IRSA COM M E RCIAL P ROP E RT IES' P ROTOCOL

May		June
% OF TOTAL PORTFOLIO*
BY GLA	BY SALES	Average
	(FY 20)	Occupancy
44%	37%
56%	63%	97.0%

*Includes Alto Rosario recently closed on 9/5 for two weeks and Alto Noa closed on 9/9 for one week (~16% of GLA)

July

August

September

REOPENING PROTOCOL

STRICT SAFETY AND HYGIENE	REDUCED HOURS AND
MEASURES	TRAFFIC

SOCIAL DISTANCE	COMMUNICATION, TRAINING
	AND INCENTIVES

10

OFFICE BUILDINGS

STOCK

(GLA: sqm)

				200 Della
				Paolera
			+4.8%
				121,144
				28,000
	Zetta
	Building			Bouchard
	115,378	115,640	710
83,213				93,144
				Boston
				Tower
FY18	FY19	FY20
		IH21E

OP E RAT IN G FIGURES

OCCUPANCY BY CLASS		Pre COVID-19		COVID-19
A+ & A	97,2%		96,6%		97,1%
			93,9%
				93,0%

B
						53,2%		52,4%
				47,5%
		46,2%
45,0%
	IVQ 19		IQ 20		IIQ 20		IIIQ 20		IVQ 20

LEASES	Pre COVID-19	COVID-19
(USD/sqm/month)

26,4

26,6

26,9

26,6

26,6

IVQ 19

IQ20

IIQ 20

IIIQ20

IVQ 20

11

July 2020

BOUCHARD 710

Entire building - 12 floors

15,0145,800

GLA sqmUSD/sqm

USD 87.2 mm	16%
Price	USD IRR

IRCP FY 2020 AND SUBSEQUENT SALES

OFFICE BUILDINGS

PARTIAL SALES

		June 2020		July and August 2020
		200 DELLA		BOSTON
		PAOLERA		TOWER
		2 floors		6 floors
		2,430		7,482
		GLA sqm		GLA sqm
		USD 16.9 mm		USD 41.4 mm
		Price		Price
		6,940		5,500
		USD/sqm		USD/sqm
		~28,000		~7,380
		Remaining GLA sqm		Remaining GLA sqm

AVERAGE CAP RATE 6.0%

12

PROJECTS

UNDER

DEVELOPMENT

200

DELLA

PAOLERA

ALTO PALERMO

	EXPANSION	3,900
	GLA sqm
		64%
		Works Progress
		FY21
		Est. Opening date
		USD 28.5mm
		Est. Investment
		~USD 6.2mm
		CAPEX deployment pending
200 DELLA PAOLERA
35,000	95%	61%
Total GLA	Works Progress	Commercialization Progress
28,000	IH21	~USD 5.8mm
IRCP GLA	Est. Opening date	CAPEX deployment pending

~USD 90mm	Construction works suspended during COVID-19
lockdown. After the end of the Fiscal Year,
Est. Investment
~USD 10mm	construction activity has been reestablished but
working with protocol restrictions.
Est. Stabilized Revenues
Both openings are delayed.

13

POLO DOT FUTURE STAGES

Former Philips Building

Giga Building

Expansion

Exa Building

14

POTENTIAL DEVELOPMENT

ALM OST TO D OUBLE CURRE N T COM M E RCIAL P ORT FOLIO

SHOPPING MALLS

OFFICES

(T h . Sq m)

1.7x
			580
		118	118
	128	130	128
4	currently under
construction
332			332
Current	Brownfield	Greenfield	Current GLA & pipeline

(T h . Sq m)

1.9x
		221
	106	106
	currently under
	30 construction
115	115	115
Current	New developments	Current GLA & pipeline

15

SANTA MARÍA DEL PLATA (BA City)

Approvals pending

~700,000 sqm

Premium mixed use Real Estate to be developed in the best location of BA city

Israel Business Center

17

ISRAEL BUSINESS CENTER

CURRE N T CORP ORAT E ST RUCT URE

Directly or indirectly

100%

Concentration Law Resolution:

• Partial sale of Gav-Yam shares during FY20 Accounting deconsolidation and loss of control
• ISPRO public debt privatization
• Mehadrin shares distributed as dividends, therefore now under DIC direct control.

83.7%

19.1%

100%

5.0%*

68.8%

45.6%

73.8%

44.0%

61.1%

26.0%

Energy

Tourism

Insurance

Financial

Telecommunications

Real Estate

Agriculture

Technology

Supermarkets

investments

NIS 1,456 mm

Sale value

29.9%

100%**

23.5

**PBC signed an

NIS/share

agreement to sell

ARS 1,480 mm

ISPRO for NIS 800MM

Gain recognition

Rental Properties

Rental Properties

* * Direct stake.

18

ISRAEL BUSINESS CENTER - IDBD CLAL SALE PROCESS

SALE PROCESS

			Direct		Through Swaps		Float
100%	100%	100%	100%	100%

					54.8%
									44.3%
					20.0%
	54.8%							24.0%				10.6%
					34.8%				20.3%				2.1%				5.0%
												8.5%
	Original Stake				FY 18				FY 19				FY 20			IQ 21E
									Private
									investors								Swaps sold
									(sales +
					Swap				options)
											• IDB debt exchange
					transactions
											• Options exercised by investors
												• Capital Increase & IDB stake dilution

SHARE PRICE EVOLUTION

8.000

6.000

4.000

2.000

Stake sold: 49.8%

As of Sep 2020

0

30/6/2012

30/6/2014

30/6/2016

30/6/2018

30/6/2020

MARKET CAP vs. BOOK VALUE

(NIS million)

8.000				Equity		Market cap
6.000					5,405

4.000

2,041

2.000

39% BV

0

30/6/2012

30/6/2014

30/6/2016

30/6/2018

30/6/2020

19

ISRAEL BUSINESS CENTER - DIC & MAIN SUBSIDIARIES

S H A R E S ' P E RFORM A NCE E VOLUT ION A S OF S E P T EMBER 1 7 , 2 0 2 0

Since control -35.7%

		YoY	-12.7%
		YTD	-17.1%
4.000			40.000
3.000			30.000
2.000			20.000
1.000			10.000
			493,4
0				0

Since control -54.5%

YoY	74.7%
YTD	26.2%
5.000	4.000
3.750	3.000
2.500	2.000
	1310
1.250	1.000

Since control -26.5%

YoY -40.3%

YTD-45.9%

19250

Since control -55.2%

YoY	50.3%
YTD	54.0%

800

2750

2000

1250

500

22.000

16.500

11.000

5.500

Since control 24.7%

YoY	8.9%
YTD	27.0%

NIS 1,456 mm

Sale value

23.5

NIS/share

ARS 1,480 mm

Gain recognition

Stake sold: 26.0%

Since control -6.6%

YoY	-8.5%
YTD	0.7%

13800

0		0
	0

20

ISRAEL BUSINESS CENTER - FINANCIAL SITUATION

JUN E 3 0 , 2 0 2 0 - US D M IL L ION

IDBD NET DEBT EVOLUTION

IDBD AMORTIZATION SCHEDULE

25.4

332

1290 1312

923

781 749 739 613

525 560

dec-12dec-13dec-14dec-15dec-16dec-17dec-18dec-19jun-20

DIC NET DEBT EVOLUTION

1466

1321

951	954	966	840
		831
		740
		628

LATEST EVENTS:

• Due to IDBD financial situation, IRSA committed on September 2019 to make three annual contributions, of NIS 70 million each, into IDBD subject to certain conditions.
• Given all the doubts regarding the fulfillment of those agreed conditions, Dolphin decided not to make the NIS 70 million contribution on September 2020.
• In this regard, IDBD began legal actions regarding our contribution.

Cash & Equivalents

78	44		44	44	44
dec-20	dec-21	dec-22	dec-23	dec-24	dec-25

DIC AMORTIZATION SCHEDULE

211.3 +	420
Cash & Equivalents	Subsequent sale of Shufersal
175	175	175	175	175

81	95

dec-12dec-13dec-14dec-15dec-16dec-17dec-18dec-19jun-20

dec-20dec-21dec-22dec-23dec-24dec-25dec-26

21

ISRAEL BUSINESS CENTER - FINANCIAL SITUATION

IDBD DEBT RESTRUCTURING PROCESS

• The Company had been negotiating with the holders of its 3 series of bonds due to its financial situation (negative NAV)
• IDBD Debt amounts to ~NIS 2 billion
• • Series 9: NIS 910 million (without guarantee)
  • Series 14: NIS 880 million (collateral of 70% DIC shares)
  • Series 15: NIS 240 million (collateral 5% CLAL shares)
• After several rounds of negotiation, where Dolphin tried to reach an agreement beneficial to the parties, the creditors rejected the offers and asked the Tel Aviv District Court to order the opening of bankruptcy procedure against IDBD.
• On September 25, 2020, the Court resolved that IDBD is insolvent and has therefore resolved to grant all three orders requested and accordingly, issued an order for the initiation of proceedings and liquidation of IDBD, and has appointed a liquidator to IDBD and interim receivers over the Pledged DIC Shares and the Pledged Clal Shares.
• As of to date, we are analyzing together with our local and international advisors the judicial decision, alternatives and course of action.
• With respect to our non-consolidated financial statements, as of June 30, 2020, the investment in IDBD is valued at zero.

Financial Performance

				FINANCIAL METRICS
				JUN E 3 0 , 2 0 2 0 - USD M ILLION
90.4	Adjusted EBITDA	107.9 Net Operating Income	52.5	Adjusted FFO
			FY204				FY204		FY204
NAV1							-22%
			15	75
		160		339			VALUATION RATIOS	June 2020
	780							CAP RATE (NOI/EV)	18%
				1.672			1.718
						1.333		EV/EBITDA	6.5x
642								P/FFO	3.8x
Shopping Malls	Offices5	Land reserves	Others 2	JV & Investees 3 Gross Asset	Net Debt	Net Asset	Net Asset	P/NAV	0.2x
		& Prop. Under		Value		Value	Value IVQ FY
		development					2020
1- Assets and liabilities adjusted by IRCP ownership
2- Includes trading properties and barters registered under intangible assets. These two items are recorded at historical cost in the financial statements
3- Includes Quality and Nuevo Puerto Santa Fe as JV and La Rural, Convention Center & TGLT as Investees.
4- FY as of June 30, 2020 Adjusted Avg. FX: $68.07
5- Includes 200 Della Paolera								24

DEBT PROFILE

JUN E 3 0 , 2 0 2 0 - USD M ILLION

344.6	Consolidated Net
Debt2
Description		Amount	Maturity
Short-term debt	23.0	<360 days
2020 Series IV (local)	140.0	Sep 2020
PAMSA loan		29.7	Feb 2023
2023 Series II		360.0	Mar 2023
(international)
GROSS DEBT		552.7
Cash & Equivalents1	154.7
Intercompany Credit	53.4
NET DEBT2		344.6

128.6	SalesSubsequent Office	3.8x	Net Debt/EBITDA
140.0	Series IV Cancellation	20.6%	Loan to Value3

AMORTIZATION SCHEDULE

A F T E R S E R I E S I V C A N C E L L AT I O N

368.1

33.8	10.8
FY 2021	FY 2022	FY 2023

1. Cash & Cash Equivalents + Investments in Financial Currents Assets + Intercompany Notes Holdings
2. Gross Financial Debt less cash & equivalents, short-term financial current investments & Intercompany Credit with parent IRSA
3. Net Financial Debt over Gross Assets Value

25

IRSA - NET ASSET VALUE

AS OF JUN E 3 0 , 2 0 2 0 - USD M ILLION

1,536 GAV		1,136 NAV		26.7% LTV

NAV

	368	410
27	58
		1,536
1,083		1,136

IRCP NAV

Hotels

Banco Hipotecario1

Landbank & Others 2

Gross Asset Value

Net Debt

Net Asset Value

1. Book value as of June 30, 2020
2. Book value as of June 30, 2020. "Others" includes investment in Condor Hospitality Trust and Israel at zero market value

26

410.3	Consolidated Net
Debt
Description	Amount	Maturity
Short term debt	14.3	<360 days
Series II (USD)	71.4	Jul 2020
Series II (CLP)	38.6	Aug 2020
Series I	181.5	Nov 2020
Series III	5.0	Feb 2021
Series IV	51.4	May 2021
Series V	9.2	May 2022
Intercompany Debt	53.4	Mar 2022
Other Debt	20.6	Feb 2022
GROSS DEBT	445.4
Cash & Equivalents1	35.1
NET DEBT	410.3

DEBT PROFILE

JUN E 3 0 , 2 0 2 0 - USD M ILLION

110.0	Series II Cancellation	104.2	Local Issuances
(July and August 2020)	(May and July 2020)
	AMORTIZATION SCHEDULE		Subsequently, on July 21, 2020,
		we issued USD 38.4 MM
	AFTER SERIES II CANCELLATION
		• Series VI (ARS): ARS 335.2 MM
	(Calendar year)
		at BADLAR + 4.0% due July 21,
203.1			2021
				• Series VII (USD linked): USD 33.7
				MM at 4.0% fixed due January
			104.0	21, 2022
		66.7
			65.6
2020	2021	2022

Central Bank Resolutions A "7106":

• Companies must refinance principal maturities operating between October 15, 2020 and March 31,2021.
• The BCRA will give access to the official FX up to 40% of the total amount and companies must refinance the remaining balance to an average term of at least 2 years.
• The refinancing plan must be submitted prior to September30, 2020.
• The maturity of Series I falls within the period contemplated by the provision, as well as other bank debt.

1 Cash & Cash Equivalents + Investments in Financial Currents Assets +

Intercompany Notes Holdings	27

Thanks