1
IQ 2017 Conference CallNovember 14, 2016
Hosted by:
Alejandro G. Elsztain, IIVP
Daniel R. Elsztain, COO
Matías I. Gaivironsky, CFO
Main Highlights for IQ FY2017 – Consolidated Basis
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Financial Consolidated Results IQ17
Argentina Business Center
oRevenues: ARS 18.7 billion (ARS 1.3 billion from Argentina & ARS 17.4 billion from Israel)
o EBITDA: ARS 2,5 billion (ARS 0,5 billion from Argentina & ARS 2,0 billion from Israel)
o Net Income: Loss of ARS 782 million (Gain of ARS 36 million from Argentina & Loss of ARS 818 million from Israel)
Attributable to IRSA Shareholders: Loss of 577 million
o Good results in the rental segment. EBITDA, excluding sales of investment properties grew by 24% in the IQ17 vs IQ16
o No results from sales of investment properties during IQ17 compared to strong sales in IQ16
o 3 Developments launched for FY 2017 : Polo Dot, Catalinas & Alto Palermo Expansion
o IRSA issued USD 184.5 MM notes at 7% and ARS 384.2 MM note at BADLAR + 299 bps due 2019 to cancel existing debt
o IDBD subsidiary DIC accepted an offer from ChemChina to sell its 40% stake in Adama
o During IQ17 IRSA acquired from IDBD 8.8% of DIC shares for approximately USD 26.7 million
Israel Business Center
Argentina Business Center - Shopping Malls
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Shopping Centers – Stock & Occupancy %
Shopping Centers – Tenants’ Sales(Quarterly Growth Rate - %)
Stock (sqm)
Occupancy
Sales (ARS)
Visitors
Summary Main Figures(IQ 2017)
28,5% 28,6%29,9% 30,0%
27,1%
35,6% 35,5% 34,3%
44,5%
35,7%
29,0%
34,3%
21,0%
31,3% 30,1%
36,3%
32,5%
25,4%
29,6%
21,0%
IQ 14 IIQ 14 IIIQ 14 IVQ 14 IQ 15 IIQ 15 IIIQ 15 IVQ 15 IQ 16 IIQ 16 IIIQ 16 IVQ 16 IQ17
Total Growth Same Shopping Sales
307.720 310.254
334.055 335.032
IQ14 IQ15 IQ16 IQ17
98,60% 98,50% 98,90% 98,40%
Argentina Business Center - Office Buildings
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Offices – Leases USD/sqm/mth & Occupancy
* Source: LJ Ramos
26,0 26,3 26,6 25,9 25,0
96,4%94,0% 93,1%
98,6%100,0%
3M 16 6M 16 9M16 FY 16 3M17
Offices – Stock (sqm) & Market Share* (A+ BA City)
80% potential increase
in EBITDA
(From USD 19.5 million
to ~ USD 34 million)
Argentina Business Center: Capex FY 2017
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Catalinas Office Building (BA)
Investment: ~USD 100 million
GLA: ~ 35,468
Alto Palermo Expansion (BA)
Investment: ~ USD 25 million
New GLA: ~ 4,000
Polo Dot Office Building (BA)
Investment: ~USD 55 million
GLA: ~ 30,000 sqm
Est.
Opening
FY2018
Est.
Opening
FY2019
Est.
Opening
FY2020
Capex 2017-2020 launched: USD 180 million – Rental GLA will increase by 17% to 483,000 sqm
Argentina Business Center - Hotels
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Avge Price / room & Occupancy(USD)
Revenues
EBITDA
Summary Main Figures(IQ17 vs IQ16)
ARS 8 MM (vs ARS -3 MM in IQ16)
ARS 173 MM (+55.9% vs IQ16)
179 178 181175
183
66,70%67,60% 67,70%
65,80% 65,30%
IQ16 IIQ16 IIIQ16 IV16 IQ17
Argentina Business Center – International
Condor Hospitality Trust (Nasdaq: CDOR) – 49% Voting Power
HOTEL EBITDA IQ17: USD 4,6 million - EBITDA Margin: 32%
Common Dividend paid on Sep-16: USD/share 0.03
(Second consecutive quarterly dividend for the Company
for the first time since 2009)
Preferred Quarterly Dividend: 6,25% anual
Last quarter Acquisitions: 2 Aloft hotels, in Kansas and Atlanta:
Aloft Leawood –Overland (Kansas): 156 rooms, price USD 22,5 million
Aloft Atlanta (downtown): 254 rooms, price USD 43.55 million- Stake: 80%
Lipstick Operating Figures Leases USD/sqm & Occupancy
Lisptick Building(49% stake)
6465
67 6789%
92%
97% 97%
FY14 FY15 FY16 IQ17
Relevant Events for IQ 17
Strategy: Fly to quality - Selective hotel sales
to achieve better margin & scale hotels
Portfolio of 27 hotels across the US16 non core hotels sold in 2016 for USD 37 mm
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Urban Real Estate 15 years AppreciationIsrael Business Center: Investment in IDBD
o IDBD subsidiary DIC accepted an offer from ChemChina to sell its 40% stake in Adama for USD 230 million in excess of the
total cancellation of the debt. We expect to close the transaction by November 2016. DIC’s net cash flow ~ NIS 800 millions
o Clal’ share increased by 4% in the IQ17 vs last quarter. Gain of ARS 181 million
o Regarding IDBD NIS 325 million issuance, the Court rejected to pledge Clal shares and we had to cancel NIS 244 million.
The balance (26% of the total issuance) is subject to Clal’ pledge approval.
oCompanies’ new issuances:
DIC: NIS 360 million at 5.7% fixed rate due 2025 • PBC (Sep-16): NIS 600 million. 500M at 3.95% fixed rate and 100M at 2,85% + CPI. Maturity 2029
• MATAM (Aug 16): NIS 400 million at 3.10% fixed rate. Maturity 2027
• CELLCOM (Sep-16): NIS 300 million at 3,55% fixed rate and NIS 100 million 2,45% + CPI due 2026
o IRSA acquired from IDBD 8.8% of DIC shares for approximately USD 26.7 million
As of September 30, 2016 IRSA controls, through Dolphin, 68.3% of IDBD – Amount invested USD 515 MM
Ownership Structure (June 30, 2016)
Latest Developments
Ownership Structure (September 30, 2016)
IRSA IRSA
8,8%
76,4% 54,9
%CLALDIC
68,3% 31,7%
Dolphin IFISA
IDBD
67,6% 54,9
%CLALDIC
68,3% 31,7%
Dolphin IFISA
IDBD
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Financial Results
Argentina Business Center:
Operating Income by Segment IQ FY17
10
Rental Segment(ARS million)
Sales & Development(ARS million)
Financial & Others(ARS million)
-18%
(Shoppings, offices + hotels) (Sales & Development) (International + Financials)
+25%
472,0
590,0
350,0
-51,0 -33,0 -27,0
1Q FY16 1Q FY17 1Q FY16 1Q FY17 1Q FY16 1Q FY17
Israel Business Center:
Operating Income by Segment 3M (Mar-16 to Jun-16)
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Consolidated Subsidiaries
In ARS million
355
449
80
-185
501
759
886
-17
Real Estate Supermarkets Telecommunications Others
Operating Income EBITDA
Consolidated Financial Results IQ17 – ARS MM
12
-577
-205Non-controling intereset
Controlling shareholders
Net Financial Costs: Loss of ARS 1,583 MM (vs. Loss of ARS 147 million in IQ16)
Net FX: Loss of ARS 147 MM (vs. Loss of ARS 123 million in IQ16)
Other FV of financial assets: Gain of ARS 262 MM (vs Loss of ARS 148 million in IQ16)
Net Financial Results
Main Effects – 1Q FY2017
1Q FY171Q FY16
Net Financial Results Operating Income Net Income
724
1,147
-1,474
-437
-782
-316
448
699
-1,056
-418-818
36
Argentina Business Center
Israel Business Center
Clal: ARS 181 mm
Net Financial cots
ARS 1,321 mm
IRSA stand alone Debt as of September 30, 2016
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Debt Amortization schedule - Proforma
(USD million)
Gross Debt: USD 405.1 MM
Net Debt: USD 315.3 MM
Sep-16: IRSA issued USD 184.5 million note at 7% and ARS 384.2 million note at BADLAR + 299 bps due 2019 to cancel existing debt
Oct-16: Cancellation of USD 75 million of IRSA 2017 bond
New IssuanceBond Class. VII y VIII
120
75
0
210
71,4
2016 2017 2018 2019 2020
48,7
Israel Business Center: IDBD Stand Alone Debt
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Net Debt Amount USD MM(As of June 30, 2016)
IDBD 728
4.8144.554
3.588
3.051
2.785
31.12.2012 31.12.2013 31.12.2014 31.12.2015 30.6.2016
IDBD Debt decrease since IRSA Investment IDBD Debt Amortization schedule (NIS MM)(As of today)
154
807 742
86
1.434
2016 2017 2018 2019 2020-2025
Cautionary Statement
Investing in all equities, including natural resources and real estate-related equities, carries risks which should betaken into consideration when making an investment.
This institutional presentation contains statements that constitute forward-looking statements, in that they includestatements regarding the intent, belief or current expectations of our directors and officers with respect to our
future operating performance. You should be aware that any such forward looking statements are no guaranteesof future performance and may involve risks and uncertainties, and that actual results may differ materially andadversely from those set forth in this presentation. We undertake no obligation to release publicly any revisions tosuch forward-looking statements to reflect later events or circumstances or to reflect the occurrence ofunanticipated events.
Additional information concerning factors that could cause actual results to differ materially from those in theforward-looking statements can be found in the companies’ Forms 20-F for Fiscal Year 2016 ended June 30, 2016,
which are available for you in our web sites.
ALEJANDRO ELSZTAIN – II VP
MATÍAS GAIVIRONSKY– CFO
Tel +(54 11) 4323 7449
Corporate Offices
Intercontinental PlazaMoreno 877 24° Floor
Tel +(54 11) 4323 7400
Fax +(54 11) 4323 7480
C1091AAQ – City of Buenos Aires – Argentina
Independent AuditorsPricewaterhouseCoopers
Argentina
Tel +(54 11) 4850 0000
Bouchard 557 7º
C1106ABG – City of Buenos Aires
Argentina
NYSE Symbol: IRS
BASE Symbol: IRSA
www.irsa.com.ar
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