PRESENTATION FOR INVESTORS. September 2018

Transcription

1 PRESENTATION FOR INVESTORS 1 September

2 2 AGENDA Market environment Financials Residential projects Commercial property Attachments

3 Number of units Flat prices in PLN 3 HOUSING MARKET - ANALYSIS OF THE MARKET ENVIRONMENT Flats for sale and sold yearly compared with the offer Average prices of flats for sale a trend Flats for sale Flats for sold Offer at the end of quarter Source: REAS, aggregate for main biggest markets (Warsaw, Wrocław, Gdańsk, Sopot, Gdynia, Cracow, Poznań, Łódź) Number of building permits granted, constructions started and flats delivered by developers on a quarterly basis Source: NBP as at 31/12/2017 Source; Bankier.pl, as at 30/06/2018 Average cost of construction of m 2 of usable floor area of a residential building on selected markets (PLN/m 2 ) Construction started Flats delivered Building permits granted Source: GUS Warsaw Source: own calculations based on Sekocenbud. Poland

4 HOUSING MARKET - ANALYSIS OF THE MARKET ENVIRONMENT GDP growth rate (%) 6,0% 5,0% 4,8% 4,6% 4,6% 4,0% 3,0% 3,7% 3,3% 3,5% 2,8% GDP growth by 4.6% y/y 2,0% 1,0% 1,8% 1,7% Stable level of interest rates. The Monetary Policy Council maintained them at the same level. The main reference rate was 1.5%. 0,0% P 2018 PKB GDP The inflation rate in 2017 was 2% with a growth forecast for 2018 Source: GUS Unemployment rate and inflation (%) 16,0% 13,4% 13,4% 14,0% 12,4% 12,4% 12,0% 11,4% 9,7% 10,0% 8,3% 8,0% 6,5% 6,1% 6,0% 4,3% 3,7% 4,0% 2,6% 2,0% 2,3% 2,0% 0,9% 0,0% 0,0% -0,9% -0,6% -2,0% P 2018 Successive decrease in the level of unemployment. In the last quarter of 2017, the unemployment rate reached the lowest level in 26 years, i.e. 6.5% Maintaining the economic situation for the Polish economy in 2018 Bezrobocie Unemployment Inflacja Inflation Source: GUS 4

5 Number of quarters 5 HOUSING MARKET - ANALYSIS OF THE MARKET ENVIRONMENT Time of selling flats on offer a trend Increase in payroll dynamics, estimated increase of even 10% y/y Increase in the prices of apartments on the primary market, caused mainly by a small supply of labour, rising personnel costs and an increase in the prices of construction materials Introduced regulatory changes special purpose investment act, planned amendment of the developer act - closed accounts Source: based on data of Emmerson Events on local housing market Housing availability index The current level of index IDM Index line cut off = 100 Change 2Q of 2018/ 1Q of 2018 Change 2Q of 2018/ 2Q of 2017 Sales -15,2% -11,0% Placed on the market for sale 3,8% -11,7% Sales in the previous four quarters -2,7% 2,2% Placed on the market in the previous four quarters -3,1% -4,1% Offer at the end of the quarter -0,6% -11,4% Including ready, but not sold -10,4% -28,4% An average price of flats placed on the market in the quarter [gross] 12,3% 14,0% An average price of flats sold in the quarter [gross] 4,2% 6,9% An average price of flats in offer [gross] 4,1% 10,7% Source: ZBP Source: REAS, aggregate for main biggest markets (Warsaw, Wrocław, Gdańsk, Sopot, Gdynia, Cracow, Poznań, Łódź)

6 INVESTMENT MARKET - GROWING ACTIVITY Total volume of investment transactions in Q EUR 2.1 billion Total volume of investment transactions in EUR 5.1 billion (the highest ever) Sale of 26 office buildings on regional markets in 2017, 75% of capital invested outside the capital city The length of lease agreements determines the prices of the best assets The best rates of return on the Warsaw office market are approx % (the city centre) and approx % outside the city centre. In the main regional cities (Cracow, Wrocław, Tricity, Łódź, Katowice) in the range of %. Best rates of return on the retail market at the level of approx % for modern, dominant shopping centres Main investment indicators 2017 Volume of transactions EUR 5.1 billion Rates of return on the best properties Office Warsaw approx. 5.2% Office regional cities approx. 6.0% Commercial buildings approx. 5.0% Warehouses approx. 6.5% 2018 forecasts Seeing Poland as a recognised real estate market with a focus on the status of a core market Forecasted maintenance of market dynamics through GDP growth based on consumption and strong macroeconomic outlook Expected continuation of the trend from 2017 extended by increased interest in less popular cities Value of investment transactions in particular sectors Rates of return on the best properties in particular sectors mld EUR EUR billion ,5% 8,0% 7,5% 7,0% 6,5% 6,0% 5,5% 5,0% 4,5% Source: Colliers International. Commercial Obiekty handlowe buildings Biura Offices Magazyny Warehouses Inne Other Biura Offices (Warszawa) (Warsaw) Biura Offices (rynki (regional regionalne) markets) Obiekty Commercial handlowe buildings Source: Colliers International and Knight Frank. 6

7 7 OFFICE MARKET CONDITIONS Office market in the largest cities (as of 30 June 2018) Supply vs. vacancy rate in H Tricity: Supply (m²): 747,000 Vacant spaces (%): 6.7 Demand (m²): 25,900 Rents: EUR per m² Under construction (m²): 45, ,1% 9,3% 9,7% 6,7% 10,8% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% - Warszawa Warsaw Kraków Cracow Wrocław Tricity Trójmiasto Katowice 0,0% Wrocław: Supply (m²):,1.011,400 Vacant spaces (%): 9.7 Demand (m²): 58,400 Rents: EUR per m² Under construction (m²): 103,800 Warsaw: Supply (m²): 5,411,100 Vacant spaces (%): 11.1 Demand (m²): 424,700 Rents: EUR per m² Under construction (m²): 173,700 Podaż Supply (m2) (m²) Współczynnik Vacancy rate (%) pustostanów (%) Source: JLL, 1H Demand distribution (regional office market) (H1 2018) Source: JLL, 1H 2018 Katowice: Supply (m²): 477,400 Vacant spaces (%): 10.8 Demand (m²): 23,900 Rents: EUR per m² Under construction (m²): 18,200 Cracow: Supply (m²): 1,158,900 Vacant spaces (%): 9.3 Demand (m²): 77,200 Rents: EUR per m² Under construction (m²): 59,300 High activity of developers - currently there is more than 1.8 million m² under construction will see approx. 880 thousand m² of offices to be completed Transaction rents in the largest cities remain stable The total demand in H on the main office markets outside Warsaw amounted to 261,800 m². In H1 2018, 252,700 m² of office space was completed, which translates into a 34% y/y increase, and a decrease in vacancy rates shows that there is a demand for new investments High activity of tenants motivates developers to implement new investments 9% 10% 11% 14% Source: JLL, H % 30% Kraków Wrocław Poznań Łódź Trójmiasto Katowice Szczecin Lublin

8 THE ECONOMIC SITUATION ON THE TRADE MARKET Trade market in the largest cities (as of 30 June 2018) Tricity: Saturation (m²/1000): 593 Rents: EUR per m² Vacant spaces (%): 5.1 Purchasing power index: 115 Increase in supply in H by 168 thousand m 2, high activity on the retail real estate market in Q The saturation index reached 258 m 2 /1000 inhabitants. Poland is still less saturated with shopping centres compared to the rest of Europe (275 m2/1000 inhabitants). The current total supply of modern retail space in Poland amounts to nearly 14 million m² (412 shopping centres in operation). Expected growth by the end of 2018 by 198,000 m² (17 under construction) Lack of clear estimates of the impact of the introduction of the Sunday trading ban Wrocław: Saturation (m²/1000): 724 Rents: EUR per m² Vacant spaces (%): 2.6 Purchasing power index: 125 Warsaw: Saturation (m²/1000): 477 Rents: EUR per m² Vacant spaces (%): 3.0 Purchasing power index: 155 Total commercial supply million m 2 GLA Share of formats in the supply of retail space 2% Source: JLL, H Katowice: Saturation (m²/1000): 466 Rents: EUR per m² Vacant spaces (%): 5.9 Purchasing power index: 117 Cracow: Saturation (m²/1000): 526 Rents: EUR per m² Vacant spaces (%): 5.4 Purchasing power index: 121 Space saturation in shopping centres vs. vacant spaces 11% 16% 800 7,0% ,0% 5,0% 4,0% 3,0% 2,0% 1,0% Centra Shopping handlowe centres Wolnostojące Detached retail magazyny warehouseshandlowe 71% Parki Commercial handlowe parks Centra Outlet wyprzedażowe centres 0 Wrocław Poznań Trójmiasto Tricity Łódź Kraków Cracow Warszawa Warsaw Katowice Szczecin 0,0% Source: JLL, H Nasycenie Saturation (m2/1000 mieszkańców) inhabitants) Poziom Level pustostanów of vacant spaces (%) (%) 8

9 NEW DIMENSION OF LEISURE IN SHOPPING CENTRES The increasing customer demand for new experiences will have an impact on the appearance of shopping centres The purchasing power of Poles is growing (social programmes, minimum wage rate) Higher revenues mean changes in the structure of expenditure (we spend less on food and more and more on lifestyle products) Apart from hard economic data, social and cultural trends are also important. The fast pace of life, the need for comfort and, at the same time, concern for health and the search for a balance in life are all trends which require trade to respond to new needs EXPERIENCE BEYOND SHOPPING Shopping centres meet the needs of Poles, for whom the quality of life and the possibility of "experiencing" are increasingly important. They are therefore becoming places where additional services, entertainment and recreation are increasingly important (the so-called shoppertainment). Catering expenditure is ahead of food expenditure 61% increase in the number of restaurants in F&B MARKET The significant increase in expenditure on catering services is reflected in the sales structure of retail facilities. The improvement and expansion of the current set of catering tenants are key aspects to differentiate oneself from the competition TRENDS SENIORS-FUTURE CONSUMERS Since seniors already make up 1/6 of the population and their disposable income is higher than the national average, one of the tasks is to extend marketing campaigns to this group of recipients Share of catering in the GLA area of shopping centres 5% 6% 7% 8% 4% 3% 3% 1% 8% 9% 14% 32% Gastronomia Catering Odzież, Clothing, obuwie, footwear dodatki Usługi Services FOR THE SAKE OF OUR HEALTH Health, which has always been one of the most important aspects of the Poles life, is considered in the context of conscious eating and lifestyle. Health&beauty brands, healthy food stores and fitness clubs are increasingly involved in the structure of trade THE INTERPENETRATION OF FUNCTIONS Designation of co-working zones in shopping centres. These facilities create a specific meeting place, combining commercial, gastronomic, office andresidential functions SPEED AND CONVENIENCE A growing number of customers want to shop in locations close to their place of residence, hence the growing number of small comfortable shopping centres and supermarkets. The network and offer of discount stores are also expanding THE OMNICHANNEL More and more brands are introducing online sales solutions while encouraging customers to make traditional purchases Source: JLL. Pustostany Vacant spaces Inne Other Artykuły Food products spożywcze Banki Banks i usługi and financial finansowe Zdrowie Health and i uroda beauty Wyposażenie Home furnishings domu services Biżuteria Jewellery i dodatki and Multimedia Rozrywka Entertainment accessories 9

10 10 AGENDA Market environment Financials Residential projects Commercial property Attachments

11 11 LC CORP GROUP SUMMARY 1H 2018 Housing sector 990 units sold (+4% y/y) 1312 units delivered (+55% y/y) 1016 units in the offer Commercialisation sector Increase in the fair value of the Retro Office House property, impact on the gross financial result 29,663 kpln Decrease in the fair value of the Arkady Wrocławskie property, impact on the gross financial result 44,750 kpln Commercialisation of the Retro Office House office building at the level of 98.8% Commercialisation of the Wola Retro office building at the level of 37.0% LC Corp Group - results Adjusted consolidated net profit mpln (1H 2018) vs mpln 86.6 (1H 2017) Consolidated net profit mpln (1H 2018) vs mpln 42.7 (1H 2017) Separate net profit of LC Corp S.A. mpln 74.9 (1H 2018) vs mpln 21.7 (1H 2017) Increase in the fair value of investment property in the amount of 80,080 kpln Increase in the valuation of liabilities on account of loans in EUR in the amount of 28,432 kpln The cumulative impact of the change in the EUR exchange rate and fair value of real estate on the Group's consolidated financial result in H amounted in total to 36,561 kpln and resulted in an increase in the consolidated gross profit

12 STRONG MARKET POSITION AND HIGH EFFICIENCY In the forefront of apartment sales in Poland (by number of apartments) Outstanding profitability of the residential business (gross margin) Source: PAP Biznes (as at 5/07/2018) (*) development agreements, preliminary sales agreements and non-refundable reservations in total (**) company listed on the Catalyst Murapol is not included due to different accounting rules High cost effectiveness ((selling costs + administrative expenses) / revenue)) Focused on project effectiveness for years Since 2009, no project budget has been exceeded. Since 2009, all projects have been successfully completed, generating higher-than-expected margins. Since 2009, all purchased land has been developed, with the projects yielding higher-than-budgeted revenues. Long-established presence in the key markets (Warsaw, Wrocław, Gdańsk, Kraków) experience in project development and sales. Murapol is not included due to different accounting rules 12

13 13 FINANCIAL PERFORMANCES 1H 2018 Systematic growth of income from sales (mpln) High gross sales margins (mpln) 38% 38% Property development activity Lease Property development activity Lease EBITDA 1 (mpln) Net profit and adjusted net profit 2 (mpln) 23% 42% 31% EBITDA adjusted % EBITDA adjusted Net profit Adjusted net profit 1 EBITDA adjusted for: (i) result of property revaluation, (ii) write-downs of inventories 2 Net profit adjusted for: (i) result of the revaluation of property and foreign currency loan, (ii) write-downs of inventories, (ii) others

14 14 HIGH-VALUE AND HIGH-YIELD ASSETS Investment property (mpln) NOI of investment property (mpln) Inventory value (mpln) - inventories include land, projects under construction and ready housing units, but not sold yet

15 15 SELECTED FINANCIAL DATA (mpln) H H H 2018/ 1H 2017 Przychody Revenues 449,9 547,0 706,2 354,5 487,7 + 37,6% EBITDA 155,2 204,7 90,3 35,9 223, ,5% Zysk Net profit netto 108,9 113,1 80,2 42,7 147, ,1% Skorygowany Zysk netto 90,3 118,0 145,5 86,6 123,2 + 42,3% Adjusted net profit Aktywa Assets 2 890, , , , ,7 + 8,8% Kapitał Equity własny 1 364, , , , ,1 + 5,5% Dług oprocentowany netto 840,6 850,1 814,1 799,6 773,6-3,2% Interest- bearing debt ROA 3,8% 3,5% 2,4% 1,3% 4,2% + 216,3% ROE 8,0% 8,1% 5,5% 3,0% 9,9% + 226,1% Wskaźnik ND/E ratiozadłużenia ND/E 61,6% 60,9% 56,2% 56,7% 52,0% - 8,3%

16 16 STABLE FINANCIAL SITUATION Debt ratios decrease 1 Maturity structure of bonds and loans (excluding the commercial sector) (million PLN) Total bonds mpln 400 Net financial debt divided into sectors (mpln) (as at 30/06/2018) 1 Financial liabilities do not include the liabilities connected with the purchase of Sky Tower Bank loans (mpln) No Project Balance Total repayment date 1 Arkady Wrocławskie 103, Wola Center 180, Sky Tower 213, Silesia Star etap I 43, Silesia Star etap II 55, Retro Office House - k. inwest. 77, Retro Office House - k. VAT 1, Kredyt inwestycyjny 50, Kredyt inwestycyjny 38, TOTAL 763,6 1 ( loan and bond debts attributable to the sector cash of the sector)/balance sheet value of investment property 2 ( loan and bond debts attributable to the sector cash of the sector)/balance sheet value of inventories Liabilities connected with the purchase of Sky Tower (mpln) 80,8 Interest-free liabilities. 2 instalments still to be paid off, payable at the end of each year: 2018, 2019.

17 17 AGENDA Market environment Financials Residential projects Commercial property Attachments

18 DEVELOPER INDUSTRY 1H 2018 vs 1H 2017 number of premises sold by selected companies listed on the WSE and Catalyst 18 1H H 2017 year-to-year change year-to-year change Murapol (***) ,7% ,5% Dom Development ,6% ,3% Robyg (***) ,5% ,3% Atal ,8% ,4% LC Corp ,0% ,0% J.W. Construction (*) ,8% ,5% Archicom ,5% ,9% Echo Investment ,3% ,3% Lokum Deweloper ,2% ,1% Budimex Nieruchomości ,6% ,8% Polnord (**) ,8% ,8% Vantage Development ,7% ,3% Inpro ,9% ,5% Ronson ,7% ,7% Marvipol ,0% ,0% i2 Development ,0% ,0% Wikana ,0% ,0% Total ,8% ,3% Source: PAP Biznes (as at 5/07/2018) (*) development agreements, preliminary sales agreements and non-refundable reservations in total (**) sales weighted by the Polnord s share in subsidiaries (***) company listed on the Catalyst

19 HOUSING UNITS SOLD IN 1H 2018 housing sector as at 30/06/2018 CITY 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q 2018 do SALE WARSZAWA WROCŁAW KRAKÓW GDAŃSK ŁÓDŹ cumulatively in the year quarter cumulatively year to year +17% +4% 2437 housing units sold and not delivered, including 74 finished housing units 19

20 SELECTED INVESTMENTS AVAILABLE FOR SALE housing sector as at 30/06/ Warsaw Osiedle na Woli sale of 214 apartments in the first half of the year Gdańsk Świętokrzyska Park sale of 81 apartments in the first half of the year Cracow Centralna Park sale of 171 apartments in the first half of the year Wrocław Między Parkami sale of 71 apartments in the first half of the year

21 HOUSING UNITS DELIVERED 1H 2018 housing sector as at 30/06/2018 CITY 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q 2018 do DELIVERY WARSZAWA WROCŁAW KRAKÓW GDAŃSK ŁÓDŹ cumulatively in the year quarter cumulatively year to year +40% +55% 21

22 HOUSING UNITS IN OFFER housing sector as at 30/06/2018 CITY in of f er as at 30/06/2018 added in 2018 to be added in 2018 to be added af ter 2018 OFFER WARSZAWA WROCŁAW KRAKÓW GDAŃSK ŁÓDŹ 4 KATOWICE

23 UNITS TO BE ADDED IN 2018 housing sector as at 30/06/ units to be delivered by the end of 2018 Gdańsk Gdańsk 364 units Warsaw Świętokrzyska Park EV- 108 units Na Woli EVIII- 177 units Bastion Wałowa EIII, IV units Wrocław Warsaw 177 units Cracow Małe Wojszyce - 66 units Wrocław 366 units Katowice Słoneczne Miasteczko EVIII- 108 units Kamienna units 90 units Cracow 173 units Przy Mogilskiej EI- 65 units Między Parkami EII units Katowice Ceglana Brama EI- 90 units

24 UNITS TO BE ADDED IN 2018 housing sector as at 30/06/ Warsaw Na Woli EVIII 177 units Gdańsk Bastion Wałowa EIII and EIV 256 units Cracow Słoneczne Miasteczko EVIII 108 units Katowice Ceglana Brama EI 90 units

25 CHANGING INVESTMENT PORTFOLIO IN 1H 2018 as at 30/06/2018 Location acquired / tender won Housing unit usable floor area (sq.m.) Estimated number of units preliminary contract concluded Housing unit usable floor area (sq.m.) Estimated number of units TOTAL Housing unit usable floor area (sq.m.) GDAŃSK KRAKÓW WROCŁAW WARSZAWA TOTAL Monitoring of offers / Seeking new locations Activation of projects from the investment portfolio depending on a market situation Location Land in analysis - potential purchase Housing unit usable floor area (sq.m.) Estimated number of units GDAŃSK KRAKÓW WROCŁAW WARSZAWA TOTAL

26 26 AGENDA Market environment Financials Residential projects Commercial property Attachments

27 27 HIGH VALUE AND FURTHER GROWTH POTENTIAL PLN 1.95 billion of carrying amount PLN 1.27 billion NAV PLN 49 million NOI for H completed projects 201,000 m² Usable Flor Area Warsaw Wrocław PU[m2]: 25,700 Occupancy: 37.0 % PU[m2]: 33,339 Occupancy: 99.5 % PU[m2]: 21,936 Occupancy: 98.8 % PU[m2]: 52,158 Occupancy: 84.3 % PU[m2]: 38,653 Occupancy: 95.9 % Katowice PU[m2] EI and EII: 29,163 Occupancy : 94.1%

28 INVESTMENT PORTFOLIO commercial real estate as at 30/06/ CITY PROJECT STATUS GAV [mpln] NAV [mpln] NOI [mpln] Usable Floor Area [sq.m.] Office Retail Usable Floor Usable Floor Area Area [sq.m.] [sq.m.] WARSAW office building WOLA CENTER COMPLETED 455,4 271,7 15, WARSAW office building WOLA RETRO UNDER CONSTRUCTION 85,3 85,3 0, WROCŁAW center ARKADY WROCŁAWSKIE COMPLETED 356,1 252,7 10, WROCŁAW office building SKY TOWER COMPLETED 532,9 318,3 12, (*) in reconstruction WROCŁAW office building RETRO OFFICE HOUSE COMPLETED 243,9 164,9 1, KATOWICE office building SILESIA STAR - Etap I COMPLETED 150,1 106,3 5, KATOWICE office building SILESIA STAR - Etap II COMPLETED 127,1 71,7 3, TOTAL 1 950, ,9 49, Retro Office House in Wrocław handed over for operation Commercialisation at a level of 98,8 per cent Progress of works for Wola Retro in Warsaw according to schedule The alteration of Sky Tower 12,400 sq m under alteration, the final date of conversion into office space: 4Q of 2020, projected Usable Floor Area: 33,732 sq m Office Usable Floor Area, 20,495 sq m Retail Usable Floor Area, which means an increase in the area rented by 2,094 sq m

29 29 AGENDA Market environment Financials Residential projects Commercial property Attachments

30 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME LC CORP GROUP 30 PLN'000 1H'2017 1H 2018 Sales revenue Revenue from sales of services Revenue from sales of goods and products Cost of sales ( ) ( ) Gross profit on sales Gain/(loss) on disposal of non-financial fixed assets 2 61 Revaluation of investment property (83 939) Write-downs of inventories - - Selling and distribution cost (7 366) (9 041) General administrative expenses (12 510) (18 359) Other operating income (expenses) 252 (321) Operating profit Financial income Financial expenses (16 005) (47 669) Gross profit Income tax (tax burden) (9 858) (31 167) Net profit

31 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS LC CORP GROUP 31 PLN'000 1H'2017 1H 2018 A. Fixed assets Intangible assets Property, plant and equipment Tangible assets Tangible assets under construction Non-current receivables Land classified as fixed asset Investment property Long-term prepayments Deferred tax assets B. Current assets Inventory Trade and other receivables Income tax receivable Short-term financial assets Cash and other cash equivalents Short-term prepayments C. Fixed assets held for sale - - Total assets

32 CONSOLIDATED STATEMENT OF FINANCIAL POSITION LIABILITIES LC CORP GROUP 32 PLN'000 1H'2017 1H 2018 A. Equity I. Equity attributable to shareholders of the parent Share capital Other capital Net profits / losses II. Minority interest - - B. Non-current liabilities Non-current financial liabilities Non-current liabilities on account of the acquisition of a subsidiary Provisions Deferred income tax reserve C. Current liabilities Current financial liabilities Current liabilities on account of the acquisition of a subsidiary Current trade and other payables Income tax liabilities Provisions Accrued expenses and revenue Total liabilities

33 CONSOLIDATED STATEMENT OF FINANCIAL POSITION LIABILITIES LC CORP GROUP 33 PLN'000 1H'2017 1H 2018 Operating income Revenue from sale of services, products and goods Revenue from interest and discounts Revenue from dividend Other financial income Other operating income Operating expenses (28 716) (66 664) Operating expenses value of goods sold (14 603) (49 328) Costs of interest and discounts (11 519) (13 418) Other financial expenses (2 592) (2 083) Other operating expenses (2) (1 835) Gross profit Income tax Net profit / (loss)

34 STATEMENT OF FINANCIAL POSITION ASSETS LC CORP S.A. 34 PLN'000 1H'2017 1H 2018 A. Fixed assets Intangible assets Property, plant and equipment Tangible assets Tangible assets under construction Non-current investments Non-current loans and receivables Long-term prepayments Deferred tax assets B. Current assets Inventory Trade and other receivables Income tax receivable Short-term financial assets Cash and other cash equivalents Short-term prepayments C. Fixed assets held for sale - - Total assets

35 STATEMENT OF FINANCIAL POSITION ASSETS LC CORP S.A. 35 PLN'000 1H'2017 1H 2018 A. Equity Share capital Balance of called-up share capital not paid Reserve funds Other reserve funds Other capital Retained profit/(loss carried forward) B. Non-current liabilities Non-current financial liabilities Non-current liabilities on account of the acquisition of a subsidiary Provisions Deferred income tax reserve 0 0 C. Current liabilities Current financial liabilities Current liabilities on account of the acquisition of a subsidiary Current trade and other payables Income tax liabilities Provisions Accrued expenses and revenue Total liabilities

36 36 SHAREHOLDERS 18,22% 39,78% 15,65% 5,93% 11,13% 9,29% SHARES COUNT NAME % QTY. Nationale-Nederlanden Powszechne Towarzystwo Emerytalne poprzez Nationale-Nederlanden Otwarty Fundusz Emerytalny i Nationale-Nederlanden Dobrowolny Fundusz Emerytalny 18, OFE PZU Złota Jesień 15, Aviva OFE AVIVA BZ WBK 11, ALTUS Towarzystwo Funduszy Inwestycyjnych S.A. 9, Aegon Otwarty Fundusz Emerytalny 5, Remaining shareholders 39, , Shareholders of LC Corp S.A. having more than 5% of shares. The information dated 4th of September 2018.

37 37 DISCLAIMER By taking part in a meeting during which this Presentation will be displayed and by reading slides presented you undertake to comply with the below restrictions. The foregoing applies to the Presentation, information contained herein presented orally by the Company or any person acting on behalf of the Company and any answers to questions relating both to the Presentation and information presented orally. The Presentation does not constitute, or form part of or be treated as proposing to any person, inducing or inviting any person to subscribe for, ensuring or otherwise purchasing any securities of the Company or any of its subsidiaries belonging to its group ( the Group ). 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38 THANK YOU 38