EFG Hermes E : 1Q2021 Earnings Release

EFG HERMES

EARNINGS RELEASE

1Q2021

INVESTOR RELATIONS

Cairo, May 19th, 2021

EFG Hermes reports a strong set of results for the first quarter of 2021, with Group earnings of EGP292 million on operating revenues of EGP1.3 billion. The Group's total assets stood at EGP41.3 billion at the end of March 2021.

MOHAMED ABDELKHABIR	HANZADA NESSIM
Group Chief Financial Officer	Group Head of IR, Budgeting & Reporting
[e-mail]	[e-mail]
Tel: [phone]	Tel: [phone]

MOHAB BAKR	KARIM FATHY
IR, Budgeting & Reporting	IR, Budgeting & Reporting Analyst
Associate VP	[e-mail]
[e-mail]
Tel: [phone]
Tel: [phone]

INVESTOR RELATIONS CONTACTS	LISTINGS & SYMBOLS
[e-mail]	The Egyptian Exchange
Tel: [phone]	Reuters code: HRHO.CA
Fax: [phone]	Bloomberg code: HRHO EY
	London Stock Exchange (GDRs)
	Reuters code: HRHOq.L
	Bloomberg code: EFGD LI

EARNINGS RELEASE 1Q2021

INVESTOR RELATIONS

FINANCIAL PERFORMANCE i. Key Financial Highlights

EFG Hermes kicked off the first quarter of 2021 on strong footings; with the Group posting revenues of EGP1.3 billion, up 30% Y-o-Y; underpinned by strong revenue contribution from almost all lines of business. The NBFIs platform continued to post Q-o-Q and Y-o-Y revenues growth, while the Investment Bank revenue bounce back from 1Q20 level, which saw the initial outbreak of the Coronavirus;

Another buoyant quarter for the NBFIs, with its revenues representing 35% of the Group's top line, and its net profits reaching 38% of the Group's profitability; its highest contribution in a single quarter. The NBFIs platform revenue grew 22% Y-o-Y to EGP441 million in 1Q21, on higher revenues generated by all its business lines. Tanmeyah reported revenues of EGP321 million, up 9% Y-o-Y, on stronger sales. valU continued to outperform, with its revenues almost tripling Y-o-Y to reach EGP56 million, on Y-o-Y portfolio expansion. Leasing and Factoring revenues rose 30% Y-o-Y and 110% Y-o-Y to EGP56 million and EGP8 million, respectively; mainly on higher arrangement fees and interest income;

Sell-side revenues rose 29% Y-o-Y to EGP296 million in 1Q21, on the back of higher Investment Banking and Brokerage revenues. Investment Banking revenues more than doubled Y-o-Y, rising 152% to reach EGP42 million, on stronger advisory fees. Additionally, Brokerage revenues gained 20% Y-o-Y to EGP255 million, mainly on stronger revenues booked by Egypt operations and lower losses incurred by the Fixed Income desk;

Buy-side revenues gained 22% Y-o-Y to EGP129 million in 1Q21, supported by strong Asset Management revenues. Asset Management revenue rose 62% Y-o-Y to EGP99 million in 1Q21; largely due to higher management and incentive fees reported by FIM. On the other hand, Private Equity revenues lost 34% Y-o-Y to EGP29 million over the same period; mainly as the comparable quarter included incentive fees related to Vezeeta exit;

Capital markets & treasury revenues rose 45% Y-o-Y to EGP389 million in 1Q21, as the quarter included unrealized gains on investments and lower fx-losses which overshadowed lower interest income from Structured Products;

Group operating expenses was broadly flat in 1Q21, down 3% Y-o-Y to EGP802 million, as the increase in employee expenses was off-set by lower loan loss provisions booked by the NBFIs platform. However, employee expenses/revenues came at 46% in 1Q21, consistent with 1Q20;

Group net operating profit reached EGP453 million, up 234% Y-o-Y in 1Q21; while the Group net profit before tax came at EGP406 million, higher a buoyant 314% Y-o-Y; as revenues increased while expenses were largely unchanged;

Albeit higher taxes, as the Group recorded deferred taxes in 1Q21 as opposed to deferred tax gains in the comparable quarter last year; the Group managed to post a net profit after tax and minority interest of EGP292 million, up a decent 223% Y-o-Y.

EFG Hermes Investor Relations

1Q2021 Earnings Release - 19 May 2021

2

EARNINGS RELEASE 1Q2021

INVESTOR RELATIONS

ii. Group Financial Performance

		Group Financial Highlights
in EGP million	1Q21	4Q20	1Q20	Q-o-Q	Y-o-Y
Group Operating Revenue	1,255	1,722	965	-27%	30%
Investment Bank	814	1,322	604	-38%	35%
NBFIs	441	400	362	10%	22%
Group Operating Expenses	802	1,024	829	-22%	-3%
Group Net Operating Profit	453	697	136	-35%	234%
Group Net Operating Margin	36%	40%	14%
Group Net Profit Before Tax	406	633	98	-36%	314%
Group Net Profit (Loss) After Tax & Minority Interest	292	466	90	-37%	223%
Investment Bank	180	377	113	-52%	60%
NBFIs	111	88	(22)	26%	N/M

Source: EFG Hermes Management Accounts

Group revenues rose 30% Y-o-Y to reach EGP1.3 billion in 1Q21, supported by the growing NBFIs revenue, and a Y-o-Y bounce back in revenues generated by almost all the Investment Bank lines of business.

Group operating expenses were broadly flat in 1Q21, down 3% Y-o-Y to EGP802 million, as the increase in employee expenses was off-set by lower loan loss provisions booked by the NBFIs platform. The increase in employee expenses was predominately related to the increase in the variable portion of the employee expenses, which moves in tandem with the increase of the Group revenues. Meanwhile, The Group booked EGP17 million of loan loss provisions in 1Q21, as opposed to the comparable quarter, 1Q20, which saw the initial outbreak of the Cornavirus, and whereby our ECL models for our NBFIs resulted in the Group booking loan loss provisions of EGP138 million in 1Q20.

This resulted in a net operating profit of EGP453 million, up 234% Y-o-Y in 1Q21 and a net profit before tax of EGP406 million higher a buoyant 314% Y-o-Y; as revenues increased while expenses were largely unchanged.

1Q21 included deferred taxes of EGP30 million on the seed capital revaluation (gains) booked during the quarter, while the comparable quarter included deferred tax gain of EGP50 million on seed capital revaluation (losses) and fx losses booked in 1Q20. Albeit higher taxes, the Group managed to post a net profit after tax and minority interest of EGP292 million, up a decent 223% Y-o-Y; with both the Investment Bank and the NBFIs recording strong bottom lines growth Y-o-Y.

EFG Hermes Investor Relations

1Q2021 Earnings Release - 19 May 2021

3

EARNINGS RELEASE 1Q2021

INVESTOR RELATIONS

Contribution by Platform

Revenues

NPAT

1Q21

Investment Bank

NBFIs

Investment Bank

NBFIs

65%

35%

1Q21

62%

38%

1Q20

63%

37%

1Q20

100%

The NBFIs platform contribution to the Group's revenues was largely unchanged Y-o-Y in 1Q21, as the increase in the NBFIs revenues was matched by an equal increase in the Investment Bank's revenue.

For the NPAT, the NBFIs contribution to the Group's profitability improved significantly recording its highest contribution to the Group bottom line in a single quarter, at 38%. It is worth noting that; 1Q20 included high provisioning levels, which resulted in the platform recording losses for the quarter.

Revenues Contribution

Group by Geography		IB by Geography	NBFIs by LOB (Egypt)
Capital	Egypt			Leasing	Factoring
Markets and			2%
50%			12%
Treasury
Operations			Egypt
31%			valU
	Regional	43%
		13%
		57%		Tanmeyah
Regional
19%					73%

EFG Hermes Investor Relations

1Q2021 Earnings Release - 19 May 2021

4

EARNINGS RELEASE 1Q2021

INVESTOR RELATIONS

iii. Business Lines Financial Performance

		Group Revenue by Platform
in EGP million	1Q21	4Q20	1Q20	Q-o-Q	Y-o-Y
Brokerage	255	317	213	-20%	20%
Investment Banking	42	124	17	-66%	152%
Sell-Side	296	442	229	-33%	29%
Asset Management	99	222	61	-55%	62%
Private Equity	29	14	44	115%	-34%
Buy-Side	129	235	106	-45%	22%
Capital Markets & Treasury Operations	389	645	268	-40%	45%
Total Investment Bank	814	1,322	604	-38%	35%
Micro - Finance " Tanmeyah"	321	291	296	10%	9%
Consumer - Finance "valU"	56	44	20	27%	189%
Leasing	56	54	43	2%	30%
Factoring	8	10	4	-23%	110%
Total NBFIs	441	400	362	10%	22%
Group Operating Revenue	1,255	1,722	965	-27%	30%
Of Which:
Fee and Commission Revenue	866	1,077	697	-20%	24%
Capital Markets & Treasury Operations	389	645	268	-40%	45%

Source: EFG Hermes Management Accounts

EFG Hermes Group kicked-off the first quarter of the year, with Group revenues spiraling up 30% Y-o-Y to reach EGP1.3 billion; underpinned by strong revenue contribution from all lines of business, with the exception of Private Equity.

Sell-side revenues rose 29% Y-o-Y to EGP296 million in 1Q21, on the back of higher Investment Banking and Brokerage revenues. Investment Banking revenues more than doubled Y-o-Y, rising 152% to reach EGP42 million, on stronger advisory fees. Additionally, Brokerage revenues gained 20% Y-o-Y to EGP255 million, mainly on stronger revenues booked by Egypt operations and lower losses incurred by the Fixed Income desk.

Buy-side revenues gained 22% Y-o-Y to EGP129 million in 1Q21, supported by strong Asset Management revenues. Asset Management revenue rose 62% Y-o-Y to EGP99 million in 1Q21; largely due to higher management and incentive fees reported by FIM. On the other hand, Private Equity revenues lost 34% Y-o-Y to EGP29 million over the same period; mainly as the comparable quarter included incentive fees related to Vezeeta exit.

Another strong quarter for the NBFIs, with the platform's revenue growing 22% Y-o-Y to EGP441 million in 1Q21, on higher revenues generated by all its business lines. Tanmeyah reported revenues of EGP321 million, up 9% Y-o-Y, on stronger sales. valU continued to outperform, with its revenues almost tripling Y-o-Y to reach EGP56 million, on Y-o-Y portfolio expansion. Leasing and Factoring revenues rose 30% Y-o-Y and 110% Y-o-Y to EGP56 million and EGP8 million, respectively; mainly on higher arrangement fees and interest income.

EFG Hermes Investor Relations

1Q2021 Earnings Release - 19 May 2021

5