Click here to load reader

STRATEGICALLY DECENTRALIZED · PDF file STRATEGICALLY DECENTRALIZED ANNUAL REPORT 2016 STRATEGICALLY DECENTRALIZED ANNUAL REPORT ... 1.1 Company Profile 6 1.2 Destinations' Map 8 1.3

  • View
    9

  • Download
    0

Embed Size (px)

Text of STRATEGICALLY DECENTRALIZED · PDF file STRATEGICALLY DECENTRALIZED ANNUAL REPORT 2016...

  • WWW.ORASCOMDH.COM

    STRATEGICALLY DECENTRALIZED

    ANNUAL REPORT 2016

    ST RA

    TE GI

    CA LL

    Y DE

    CE N

    TR AL

    IZ ED

    AN NU

    AL R

    EP O

    RT 2

    01 6

  • STRATEGICALLY DECENTRALIZED

  • Contents

    AT A GLANCE

    1.1 Company Profile 6

    1.2 Destinations' Map 8

    1.3 Chairman's Note 10

    1.4 CEO's Letter 11

    01

    BUSINESS SEGMENTS

    2.1 Hotels 18

    2.2 Real Estate and Construction 20

    2.3 Destination Management 22

    2.4 Land Sales 24

    2.5 Other Operations 25

    02

    COUNTRIES 3.1 Egypt 30

    3.2 Oman 42

    3.3 UAE 48

    3.4 Montenegro 50

    3.5 Switzerland 52

    3.6 Morocco 54

    3.7 UK 55

    03

    ORASCOM * FOCUS VISION

    Breakthrough with Focus

    CORPORATE GOVERNANCE 4.1 Group Structure and Significant Shareholders 58

    4.2 Capital Structure 60

    4.3 Board of Directors 62

    4.4 Executive Management 68

    4.5 Compensation Shareholding and Loans 70

    4.6 Shareholders' Participation 71

    4.7 Changes of Control and Defense Measures 72

    4.8 Employees 72

    4.9 External Auditors 73

    4.10 Information Policy 74

    04

    05 INVESTOR INFORMATION 78

    CONSOLIDATED FINANCIAL STATEMENTS 2016 ORASCOM DEVELOPMENT HOLDING AG 6.1 Consolidated statement of comprehensive income F-3

    6.2 Consolidated statement of financial position F-4

    6.3 Consolidated statement of changes in equity F-6

    6.4 Consolidated statement of cash flows F-7

    6.5 Notes to the consolidated financial statements F-10

    06

    GLOSSARY OF TERMS

    08

    STATUTORY FINANCIAL STATEMENTS 2016 ORASCOM DEVELOPMENT HOLDING AG 7.1 Income statement F-86

    7.2 Statutory balance sheet F-87

    7.3 Statement of changes in equity F-88

    7.4 Cash flow statement F-89

    7.5 Notes to the financial statements F-90

    07

    186

  • 1.1 Company Profile 1.2 Destinations’ Map 1.3 Chairman's Note 1.4 CEO's Letter

    ORASCOM DEVELOPMENT AT A GLANCE01

  • Orascom Development is a leading developer of fully integrated destinations, including hotels, private villas and apartments, leisure facilities such as golf courses, marinas and supporting infrastructure.

    The Group’s diversified portfolio of destinations is spread over multiple jurisdictions such as Egypt, UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom. Orascom Development has a dual listing: a primary listing on the SIX Swiss Exchange; and a secondary listing on the EGX Egyptian Exchange.

    1.1 Company Profile

    Focusing on “Life as it should be” across all destinations

    Acquisition Phase

    Development Phase

    Operational Phase

    NEW DESTINATION

    IDENTIFICATION ACQUISITION &

    INITIAL CONCEPT

    LAND BANK VALUE CREATION

    REAL ESTATE

    HOTEL DEVELOPMENT

    DESTINATION DEVELOPMENT

    PROJECT MANAGEMENT OPERATIONS MANAGEMENT

    HOTEL OPERATIONS

    PLANNING AND DESIGN PROPERTY AND

    FACILITY MANAGEMENT

    DESTINATION OPERATIONS

    RE OWNER SERVICES

    In itia

    l d es

    tin at

    io n

    co nc

    ep t

    D et

    ail ed

    d es

    tin at

    io n

    co nc

    ep t

    M ar

    ke tin

    g co

    nc ep

    t a nd

    sa le

    s s tra

    te gy

    Pr od

    uc t s

    ig n-

    of fs

    St ar

    t o f s

    ale s

    St ar

    t o f c

    on str

    uc tio

    n

    In te

    rn al

    / O pe

    ra to

    r h an

    d ov

    er

    Bu ye

    r h an

    d ov

    er /

    op en

    in g

    St ar

    t o f o

    pe ra

    tio n

    Pe rio

    di c

    as se

    ss m

    en t o

    f pe

    rfo rm

    an ce

    a nd

    se rv

    ice q

    ua lity

    1 2 3 4 5 6 7 8 9 10

    CONSTRUCTION

    01 ORASCOM DEVELOPMENT AT A GLANCE

    01 ORASCOM DEVELOPMENT AT A GLANCE

    6 7Annual Report - 2016 STRATEGICALLY DECENTRALIZED

  • The Group’s diversified portfolio of destinations is spread over multiple jurisdictions such as Egypt, UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom.

    1.2 Destinations Map

    01 ORASCOM DEVELOPMENT AT A GLANCE

    100.3 million m2

    TOTAL LAND AREA

    17.7 million m2

    COMPLETED AREA

    17.7% COMPLETED

    01 ORASCOM DEVELOPMENT AT A GLANCE

    SWITZERLAND

    OPERATING DESTINATION Investment Held in Associates

    Andermatt Swiss Alps

    UAE

    OPERATING DESTINATION

    The Cove

    MOROCCO

    DEVELOPING DESTINATION

    Chbika

    OMAN

    OPERATING DESTINATIONS

    Jebel Sifah Hawana Salalah

    DEVELOPING DESTINATION

    As Sodah Island

    DESTINATION IN THE PIPELINE

    City Walk, Muscat

    U.K.

    DESTINATION IN THE PIPELINE

    Eco-Bos

    MONTENEGRO

    OPERATING DESTINATION

    Luštica Bay

    EGYPT

    OPERATING DESTINATIONS

    El Gouna Taba Heights Haram City Makadi Fayoum

    DEVELOPING DESTINATION

    Qena Gardens

    OTHER HOTELS

    Royal Azur and Club Azur Zahra Oberoi

  • Samih O. Sawiris, Chairman of the Board of Directors

    I am very pleased with the management achievements during 2016 and the enhanced operational performance that was witnessed across our business segments, despite the difficult business environment that we operated in. The turbulence in the tourism market and the fluctuating foreign exchange rates, have required the company's management and its Board to be exceptionally active. Our commitment to our clients and to constantly evolve our organization to meet their needs is also central to our framework for creating long-term value for our shareholders.

    During 2016, the new management team headed by Khaled was mandated by the Board to focus more on identifying our challenges and development areas related to strategy and internal structure. We asked the management to come back to the Board at the end of the year with a thorough assessment of the current business model indicating areas of inefficiencies and enhancements and then providing their vision of how this company should look like 5 years down the road.

    The Board and I were pleased with the new strategy that was presented by the management in December 2016. I personally was glad to have more clarity on the 5 years’ direction that was put down for each destination independently and for the Group’s business model in general. More importantly was that the team kept the same essence and true value of this Group intact and continued to capitalize on its core asset which remains to be its land bank. They did so by presenting the different approaches of how to generate and monetize the maximum value possible from this asset over the course of its development. I now believe that by the thorough implementation of this strategy the market and the shareholders will soon get to acknowledge the true value of this Group that has been severely discounted.

    I would like to extend my thanks and appreciation to our employees and their continuous commitment and endurance during those challenging times and also thank them for putting the company on the right track to noticeable success.

    On behalf of the entire Board of Directors, thank you all very much for your valued support and ongoing trust.

    Samih O. Sawiris Chairman of the Board of Directors

    1.3 1.4Chairman’s Note CEO’s Letter

    Khaled Bichara, CEO of ODH

    January 1st, 2016, was my first official day as the CEO for the Group, I was fortunate enough to have succeeded Eng. Samih in this role, a founder that I greatly admire and respect and was also lucky to have found a talented and dedicated team that together with the Chairman have built a global touristic landmark, known in many parts of the world.

    Throughout the first half of the year, important positions within the organization have been changed and filled, in the executive and top management level. This team then worked together on conducting a thorough assessment of the current business model of the Group and how it has been managed.

    The assessment involved conducting business review sessions with several department heads and employees and meeting with external advisors, investors, analysts and shareholders of the company. Several challenges and areas of inefficiencies were identified as an outcome of those meetings. Challenges included the following: 1) The inefficient holistic structure of the organization and how complex it is to manage, thus not reflective of the potential value creation, 2) No clear visibility regarding the usage of the remaining land bank; and 3) Timing on when the company will be able to operationally break-even.

    The management team worked on revisiting the Group’s strategy and drafted a guideline on how this business should be managed moving forward. The proposal that was then presented and approved by the Board was to revise the Company’s medium to long term strategy along three guidelines (or “Pillars”):

    1. Esta

Search related