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2013-06-26 1. 2 Contents The most significant events in Q1 2014 Factors influencing the Company's activity in Q1 2014 The strategy for next years Sales.

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Presentation on theme: "2013-06-26 1. 2 Contents The most significant events in Q1 2014 Factors influencing the Company's activity in Q1 2014 The strategy for next years Sales."— Presentation transcript:

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2 2 Contents The most significant events in Q Factors influencing the Company's activity in Q The strategy for next years Sales of flats in Q Selected consolidated financial data for Q Gross margin on sales vs gross profit on sales Implementation of the profit from sales from developer projects in Q Overheads vs employment Premises in the offer to be recognized in the result in subsequent quarters Housing investments implemented in Q Investments planned to be run The most important marketing events in Q1 2014: Marketing and sales policy in Q Selected projects planned to be run in 2014: Conditions for intensification of the investment program Basic information on the issue of Series C Shares Schedule of transactions - key dates Projects to be run in

3 3 The most significant events in Q Obtaining a final use permit for the investment ofOaza Piątkowo in Poznań. Obtaining a final building permit for the investment of Osiedle Centrum III in Łódź. The total repayment of a loan granted in the amount of PLN 20 million to refinance the cost of the construction of premises in Ożarow Mazowiecki. Submission of applications for building permits for the following investments: Bliska Wola, stages B1 & B2 (964 units, Warsaw) – permits obtained in Q2 2014, stage B1 launched to sale. Shares Issue Announcement and commencement of works on the prospectus preparation.

4 4 Factors influencing the Company's activity in Q Maintaining low interest rates of mortgages as a favourable factor to finance the flat purchase. Polish housing market enters the growth phase of the business cycle - increase in the number of transactions and housing prices. The introduction of the government program Mieszkanie dla Młodych (since early 2014) - the Company had at the beginning of the year 500 completed units available in this program. Stable prices of materials and construction services. Conduct of marketing and advertising activities aimed at intensifying sales of completed units. Finalisation of processes associated with the preparation of key investments designed to run in the next quarter.

5 5 Factors influencing the Company's activity in Q Still restrictive policy of FSA in relation to mortgage credits - restrictions on loans in foreign currencies, Recommendation S Act developer introducing trust accounts - the act inhibits quick proceeding in the scope of financing and enforces increase in financial expenses Changes in government support projects in the housing market - the uncertainty in the market resulting in significant seasonality of demand Long-lasting process of obtaining necessary administrative decisions in relation to the currently ongoing and future projects.

6 6 The strategy for next years To start the biggest number of new residential projects offering faster, current cash flow and return on investment from previously purchased plots. Implementation of projects within SPVs to increase transparency and accelerate the flow of financing acquisition. To intensify works related to the preparation of project documentation and obtaining building permits To strengthen the leader position both among developers in Warsaw (on the basis of an owned extensive land bank), and across the country, due to its expansion into other areas of Poland– Tri-City market, Łódź, Katowice, Poznań Reduction and postponement of commercial and hotel projects, acquisition of partners for implementing these projects is being considered Selective acquisition of new locations and reducing the scale of construction land bank Active actions toward non-performing assets Continuing the reduction of fixed costs, including overhead costs, through an internal reorganization of the Company The new issue of shares in order to speed up the launch of the new investments.

7 7 Sales of flats in Q J.W. Construction Holding S.A in Q sold 248 units compared to 189 units y/y, an increase by 31.22% y/y. An important factor influencing the sale of the first quarter is the government program MdM, stimulating demand from customers. * Data on sales include sales of "Oxygen" investment (25 premises in Q1 2014, 17 premises in Q1 2013)

8 8 Selected consolidated financial data for Q Decrease in revenues from sales in Q by 24%, y/y. Increase in net profit in Q by 21% y/y Selected financial dataQ1 2013Q1 2014Change Revenues on sales PLN 85.9 milPLN 65.3 mil -24.0% Gross profit on salesPLN 18.0 milPLN 15.5 mil-13.9% Gross margin on sales21%23.7%+2,7 p.p. Operating profitPLN 14.7 milPLN 13.1 mil-10.9% Net profitPLN 4.3 milPLN 5.2 mil+20.9%

9 9 Gross margin on sales vs gross profit on sales Gross margin on sales in the long term is maintained at a level of about 20%.

10 10 Implementation of the profit from sales from developer projects in Q The percentage of particular investments recognized in profit from sales within developer projects: Units recognized in results in Q vs Q1 2014

11 11 Overheads vs employment Including employment in hotels: * 99 people ** 140 people *** 140 people Number of people 361***

12 12 Premises (in units) in the offer to be recognized in the result in subsequent quarters sold premies not transferred 298

13 13 Housing investments implemented in Q In Q1 2014, the Company implemened 4 residential investments with the total number of 362 units covering 19,000 square metres of UFS. In addition to housing investments, the Company implemented a hotel venue in Q1 called Stara Dana in Szczecin with an estimated net total area of 5,077 m2. Housing investmentsProject's name Number of units US (m 2 ) Pending investments - housing Bliska Wola - Stage A, Warsaw - J.W. Group Sp. z o.o. 1 SKA 1567,716 Nowe Tysiąclecie, Katowice – Nowe Tysiąclecie Sp. z o.o. 1497,085 "Villa Campina" - houses,5803 Rezydencja Redłowo – Gdynia – Seahouse Sp. z o.o.523,223 TOTAL36218,827

14 14 Investments in Warsaw and vicinity Investment Numbe r of units Usable Space Warsaw, Bliska Wola Stage II * B ,368 m2 Warsaw, Bliska Wola Stage II * B ,960 m2 Warsaw, Bliska Wola Stage III479 21,185 m2 Warsaw, Bliska Wola Stage IV52724,200 m2 Warsaw, Bliska Wola Stage V73333,000 m2 Warsaw, Zielona Dolina II* stage I549 25,486 m2 Warsaw, Zielona Dolina II* stage II31512,772 m2 Warsaw, Berensona Street*263 11,717 m2 Warsaw, Antoniewska Street221 13,763 m2 Investments to be run (as at 31 March 2014) During the next 2 years, the Company, on a basis of an owned land bank, plans to start the implementation of about 5,800 units: *Investments planned to be run in 2014 Investment Number of units Usable Space Warsaw, Lewandów IV*903,230 m 2 Warsaw, Aluzyjna Street I32 1,850 m2 Warsaw, Aluzyjna Street II68 3,670 m2 Warsaw, Odkryta Street II82 4,158 m2 Warsaw, Osada Wiślana *21 1,088 m2 Warsaw, Zielona Dolina III54 2,248 m2 Warsaw, Nowodworska 12 Street 1,903 m2 Villa Campina - houses, Ożarów*31 4,983 m2 Warsaw, Lewandów III129 7,501 m2 Total Number of units 4,570 Usable Space 216,081 m 2

15 15 Investments beyond Warsaw Investments planned to be run Investment Number of units Usable Space Katowice, Nowe Tysiąclecie, Stage 2, Building B1149 7,085 m2 Katowice, Nowe Tysiąclecie, Stage ,175 m2 Osiedle „Centrum III”, Łódź Tymienieckiego Street* 96 4,886 m2 Katowice, Bałtycka Street, Stage I*71 4,182 m2 Katowice, Bałtycka Street, Stage II795,309 m2 Katowice, Bałtycka Street, Stage III86 4,996 m2 Gdynia, Spokojna Street, Stage II236 13,500 m2 Gdynia, Spokojna Street, Stage I*196 11,471 m2 Gdynia, Sochaczewska Street*51 3,478 m2 Total:1,293 71,082 m2 *Investments planned to be run in 2014

16 16 The most important marketing- sale events in Q Concentration of promotional activities on the offer which is available in the program of "Mieszkanie dla Młodych" - in Warsaw, Łódź, Poznań and Katowice. "Mieszkanie dla Młodych" Seminar Organization (in Hotel 500, Zegrze) - combination of educational functions with the promotion of Zielona Dolina development. Completion of the sale of apartments in investments such as Lewandów Park and Bliska Wola (Stage I) Construction completion of the Oaza Piątkowo investment - advertising campaign of apartments ready to settle Introduction to the sale of energy-efficient houses in the Villa Campina investment

17 17 Marketing and sales policy in Q Conducting strategic marketing activities in all areas of communication with the Client Individual approach to the Client – the flexibility in terms of possibility of negotiating the prices depending on the payment amount and schedule. The organization of the "Saleout of Last Flats" from ready to settle investments Organization of regular Open Days at Trade Offices and participation at Local Real Estate trade fairs Effective cross marketing - the cooperation with Hotel 500 and Czarny Potok Resort & Spa chain in terms of cross-promotion.

18 Selected projects planned to be run in 2014:

19 19 ProjectBliska Wola LocationWola, Warsaw Number of units964 UFS (m 2 )43,328 Description good location - just 3 km to the strict city centre very well developed communication infrastructure - subway station in the end of 2014 recreation area - central park interesting, modern architecture of buildings competitive prices of flats Selected projects planned to be run in 2014: Warsaw, Kasprzaka Street - Bliska Wola, Stage II (B1+B2)

20 20 Project Łódź Tyminieckiego Street LocationŁódź, Street Number of flats:96 UFS (m 2 )4,886 Description the design covers 3 facilities with max. 7 storeys prestigious location in the historic area of Łódź wide choice of metric areas and rooms arrangements enclosed and supervised area safe playgrounds Selected projects planned to be run in 2014: Łódź, Tymienieckiego Street – Osiedle Centrum III

21 21 Project Warsaw, Tyminieckiego Berensona Street Location Warsaw, Berensona Street Number of flats:263 UFS (m 2 )11,717 Description the design covers 12 buildings low, prestige development located on Białołęka– the most resiliently developing district in Warsaw safe playgrounds in the area of the development proximity of agglomeration conveniences: schools, kindergartens, shopping centres quick access to the downtown area. Selected projects planned to be run in 2014: Warsaw, Berensona Street

22 22 Project Gdynia, Spokojna Street Location Gdynia, Spokojna Street Number of flats:Stage UFS (m 2 )Stage 1 11,471 Description attractive location - vicinity of Leśna and Spacerowa streets low, cosy development wide choice of metric areas and rooms arrangements the design of rooms arrangement allows for any interiors arrangement proximity of beach and Trójmiejski Park Krajobrazowy Selected projects planned to be run in 2014: Gdynia, Spokojna Street, Stage I

23 23 Project Gdynia, Sochaczewska Street Location Gdynia, Sochaczewska Street Number of flats:51 UFS (m 2 )3,478 Description attractive location - the area of Sochaczewska Street green area, proximity of the beach, rich urban infrastructure low, cosy development interesting architecture varied metric areas, floorplans easy to arrange Selected projects planned to be run in 2014: Gdynia, Sochaczewska Street

24 Planned Issue of Shares

25 Conditions for intensification of the investment program The entrance of the housing market in the growth phase of the cycle resulting from the gradual improvement of the macroeconomic situation in Poland and the increasing availability of credit financing; Reflection on the housing market confirmed by the increase in housing sales and increase transaction prices over the past 12 months; The increase of quarterly ROS in the Group's offer in the second half of 2013 additionally confirms the favourable situation on the primary market activity; The Group has a significant land bank acquired and prepared for development in times of market downturn; The bank land includes plots in major Polish cities including prestigious locations in Warsaw and Gdynia; The Group intends to develop its offer more than 2,300 units in 2014 and another 3,500 units in next two years; Commencement of housing projects in the assumed scale and schedule will require obtaining approximately PLN 95 million of own funds to complement their own contribution in projects to 30%; Given the recovery in demand into account, the launch of a significant number of new projects in various locations should result in an abrupt increase in the Group's sales in the near term; The Group's goal is to achieve the sale rate at the level of about 2,000 units per annum in the medium term; Inflows from the realization of the investment program will provide a major source of reducing financial leverage of the Group in the future.

26 Basic information on the issue of Series C Shares Issuance rate Assumed net value of issue The approach of the Majority Shareholder Assumed issue price From 3 to 40,554,960 shares of series C (up to 75% of the current share capital of the Company) Dependent on the issue price To be confirmed at a later stage, based on feedback from investors and the market price of the shares The Majority Shareholder holding approximately 62.8% of the total number of shares, declared the execution of one's subscription rights and acquisition of new shares Issue targets To complement the own contribution to 30% in parts of ongoing and planned developer projects (min. 68.6% of the inflows from the issue) Conversion of part of the Group's interest-bearing liabilities (max. 31.4% of the inflows from the issue) Number of shares per 1 subscription right The subscription right of 3 shares per every 4 subscription rights, (0.75 shares for 1 subscription right)

27 9 April 14 May 26 May 4 June Adoption of a resolution by the Extraordinary General Meeting on the issue shares with subscription rights Financial results release for Q Publication of the issue price of series C shares and the number of issued shares Other key dates for the issue will be derived from the date of approval of this Prospectus Quotation of subscription rights will start after the approval of the Prospectus and will continue 8 working days Subscriptions for shares will be completed three days after the end of quotation of subscription rights Allotment of shares is expected to be approximately 7 working days after the end of the subscriptions Within the issue it is expected to use the rights to the shares until the registration of a new issue The day of subscription right Schedule of transactions - key dates 30 May The last day of the shares quotation with subscription right

28 Projects to be run in Project's nameMarket SegmentLocation UFS in m2 Service and commercial area in m2 Number of units Bliska Wola II - Stage B1Flats with higher standardWarsaw29, Bliska Wola II - Stage B2Flats with higher standardWarsaw12, Zielona Dolina II, Stage IPopular flats:Warsaw23,8881, Zielona Dolina II, Stage IIPopular flats:Warsaw12, Berensona StreetPopular flats:Warsaw11, Osada Wiślana (67/1)Popular flats:Warsaw1, Katowice, BAŁTYCKA STR., stage I Popular flats:Katowice4, Gdynia, Sochaczewska StreetPopular flats:Gdynia3, Łódź Centrum IIIPopular flats:Łódź4, Gdynia, Spokojna / Leśna Street, stage I Popular flats:Gdynia11, Lewandów 4 (53/6)Popular flats:Warsaw3, Houses - Ożarów, Anita i MargaritaSingle-family housesOżarów Maz4, Bliska Wola III - Stage CFlats with higher standardWarsaw20,94119, Bliska Wola III - Stage DFlats with higher standardWarsaw23,60035, Bliska Wola III - Stage EFlats with higher standardWarsaw33,00017, Zielona Dolina IIIPopular flats:Warsaw2, Katowice, Tysiąclecia stage B1Popular flats:Katowice7, Katowice, Tysiąclecia stage A2, B2, B3 Popular flats:Katowice16, Katowice, BAŁTYCKA STR., stage II Popular flats:Katowice5, Katowice, BAŁTYCKA STR., stage III Popular flats:Katowice4, Odkryta Street IIPopular flats:Warsaw4, Aluzyjna Street IPopular flats:Warsaw1, Aluzyjna Street IIPopular flats:Warsaw3, Lewandów IIIPopular flats:Warsaw7, Antoniewska StreetPopular flats:Warsaw13, Nowodworska 12 StreetTerraced housesWarsaw1, Gdynia, Spokojna / Leśna Street, stage II Popular flats:Gdynia13, Total 283,59374,3715,863 Source: Company

29 29 Thank you for your attention INVESTOR RELATIONS: Małgorzata Szwarc-Sroka Economy Division and Investor Relations Office HeadDirector of Economic and Director of Investor Relations of J.W. Construction Holding S.A. Member of Management Board of J.W. Construction Sp. z o.o. phone: :


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