Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — H1 2011 Earnings Presentation
43 slides from Altarea Sca's earnings presentation, Jul 29, 2011
Slide 1: Interim Results 2011
INTERIM RESULTS 2011 RETAIL RESIDENTIAL OFFICES
Slide 2: Altarea Cogedim: a major operator in the real estate market
ALTAREA COGEDIM: A MAJOR OPERATOR IN THE REAL ESTATE MARKET WITH POSITIONS IN THE THREE MAIN SEGMENTS RETAIL PROPERTY RESIDENTIAL PROPERTY OFFICE PROPERTY A financial model that combines recurring income and value added Rental income generated by retail Development company's value property added PRE
Slide 3: Following our roadmap: overview of strategic goals
FOLLOWING OUR ROADMAP: OVERVIEW OF STRATEGIC GOALS Increasing the percentage of assets in large shopping centres and Family Village Retail Parks RETAIL Priority development focus on the Greater Paris Area and Grand Sud PROPERTY regions Target in 3-4 years: 30-35 mid-size shopping centres worth ~ €10
Slide 4: H1 performance in line with roadmap
H1 PERFORMANCE IN LINE WITH ROADMAP Launch of Villeneuve la Garenne €211m in potential Two new Family Villages authorised investments RETAIL €58m in asset disposals PROPERTY Tenant revenues: up 2.4%; large shopping centres and retail parks outperformed Sharp rise in financial indicators (revenues up
Slide 5: Key indicators – H1 2011
KEY INDICATORS – H1 2011 € per share H1 2011 Change(3) Recurring net profit(1) €6.29 + 13% Net asset value(2) €146.7 + 5.3% LTV 51.9% - 1.3pt (1) Recurring operating profit after interest expense and income tax (2)Diluted going-concern NAV after financial instruments and non-SIIC tax regime (3)Chang
Slide 6: Residential Property
RESIDENTIAL PROPERTY PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 6
Slide 7: Operating profit - Residential
OPERATING PROFIT - RESIDENTIAL €m - IFRS H1 2011 H1 2010 Change Revenue 344.0 248.8 + 38% Net property income 46.4 24.6 + 88% % of revenues 13.5% 9.9% Recurring operating profit 38.5 18.7 + 106% Operating margin 11.2% 7.5% + 3.7pts Results reflect business recovery in 2009(1) (1) It takes 18 to 24 m
Slide 8: Market trends
MARKET TRENDS(1) Significant slowdown in Q1 (new housing reservations down 24%)… o Supply shortage after an exceptional Q4-2010 o Scellier investments: -34% o Market figures for 2011 revised downward (less than 100,000 units) … owing to downturn in business climate… o Rising interest rates o High pr
Slide 9: Business activity in H1-2011
BUSINESS ACTIVITY IN H1-2011 New housing reservations Business activity €m incl. tax €m incl. tax unless otherwise H1 2011 H1 2010 + 4.5% indicated 590 617 Land procurement 918 767 Marketing launches 677 569 Marketing launches (no. of units) ~ 2,500 2,642 Disposal rate (%) 21% 21% Backlog (excl. tax
Slide 10: Breakdown of sales in H1
BREAKDOWN OF SALES IN H1 H1 2011 H1 2010 Percentage generated in Greater 64% 50% Paris Area Percentage of premium properties 50% 39% Percentage of home buyers 55% 45% In a climate of relatively weaker market demand, Cogedim maintained its positions owing to its historical fundamentals PRESENTATION O
Slide 11: Product quality is quintessential
PRODUCT QUALITY IS QUINTESSENTIAL Location and architectural elegance Close attention paid to quality in every detail: materials, comfort, decor Quality control and customer satisfaction A benchmark in eco-performance of buildings(1) Chaville - Mon Jardin, La Forêt (1) Ranked No. 1 of the eight larg
Slide 12: New product launches in H1
NEW PRODUCT LAUNCHES IN H1 Private communities Cogedim Club Secure residential compounds on landscaped Urban communities near transportation facilities grounds offering premium services and shared offering services geared to active seniors who facilities (pools, playgrounds, golf driving ranges, ren
Slide 13: Building a stronger position in the Grand Sud: Urbat project
BUILDING A STRONGER POSITION IN THE GRAND SUD: URBAT PROJECT (EXCLUSIVE NEGOTIATIONS SUBJECT TO CONTINGENCIES) Regional developer established in regions with high population growth (1) 2010 business volume: €185m Increased geographical coverage for Cogedim, complementary ranges Toulouse Nîmes Toulon
Slide 14: Residential segment: 2011 targets
RESIDENTIAL SEGMENT: 2011 TARGETS Increase in market share Meeting prudential criteria for investment commitments Revenue target: €800m–€850m Net property income margin in the double digits PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 14
Slide 15: Strategic outlook - 2011-2015
STRATEGIC OUTLOOK - 2011-2015 Cogedim's brand equity underpins strategy to expand customer base Human and financial resources allocated to continue creating the products of the future Room to round out national coverage Staff with a proven ability to adapt Over the long term, Cogedim holds potential
Slide 16: Office Property
O F F I C E PROPERTY PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 16
Slide 17: Operating profit - Office
OPERATING PROFIT €m - IFRS H1 2011 H1 2010 Change Revenue 50.6 35.3 + 44% Net property income 2.8 3.6 - 21% % of revenues 5.5% 10.1% Fees 2.7 4.5 - 40% Recurring operating profit (0.1) 4.4 NA % Revenue (0.1%) 12.5% Change in mix during the first half (more income from buildings, less from fees on de
Slide 18: The office property market
THE OFFICE PROPERTY MARKET (1) Investments stable at €4.4bn… o Investor interest in "core" assets and in the most liquid sectors o Banks are wary: the market is dominated by equity investors … in a "wait-and-see" market o Take-up in Greater Paris area stable over the past year (1.1 million sqm ) o U
Slide 19: Transactions completed in H1-2011
TRANSACTIONS COMPLETED IN H1-2011 €88m invested in a slack market Lyon – Nexans – Ambre and Opale La Défense – Tour Chartis Off-plan sales: €45.4m including tax Delegated project manager (renovation) 12,300 sqm net floor area, BBC certified 30,000 sqm net floor area Completion scheduled for Q2 2013
Slide 20: Completions in H1 2011
COMPLETIONS IN H1 2011 131,600 sqm completed in H1 La Défense – Tour First 87,600 sqm net floor area of office space Largest HQE project in Europe Very High Energy Efficiency rating Grand prix national de l’ingénierie Tallest skyscraper in La Défense (231m) MIPIM Award 2011 Redevelopment for AXA / B
Slide 21: Altafund: equity to capitalise on the recovery
ALTAFUND: EQUITY TO CAPITALISE ON THE RECOVERY Initial closing: €350m in equity raised in Q1(1) €125m of additional commitments secured in Q2(1) Group contribution: 20%, capped at €100m Ultimate goal: ~ €600m (investment capacity > €1bn after leverage) Target: Greater Paris Area, projects with high
Slide 22: Office property: 2011 targets
OFFICE PROPERTY: 2011 TARGETS Completion of 39,730 sqm of hotels and offices in Greater Paris Area Green One - 5,175 sqm - Paris 18 Suite Novotel - 6 140 sqm - Crédit Agricole Alpes Provence – Issy les Moulineaux 21,800 sqm – Aix Closing on Altafund finalised Initial investments in office property f
Slide 23: 2011-2015 outlook
2011-2015 OUTLOOK Capitalising on the Group's technological expertise in property assets with high environmental value added Strong contribution to earnings as from 2014-2015 Risk profile: under control Altarea Cogedim Entreprise: 5%-10% market share PRESENTATION OF FIRST HALF RESULTS – 29 July 2011
Slide 24: Retail Property
R E T A I L PROPERTY PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 24
Slide 25: Operating profit - Retail
OPERATING PROFIT €m - IFRS H1 2011 H1 2010 Change Rental revenue 80.8 80.9 - 0.1% Net rental income 74.9 74.7 + 0.3% % of rental income 92.7% 92.3% Recurring operating profit 64.1 66.9 - 4.1% % of rental income 79.4% 82.7% - 3.3pt Net rental income stable Increased take-up of development costs PRESE
Slide 26: Market trends
MARKET TRENDS Consumer spending patterns undergoing sea change o Small increase (%) in absolute value(1) o Build-up of e-commerce, increased price sensitivity o A multi-faceted consumer (premium/discount, rational/impulsive, want/need) Retail merchants' response o Price Retail parks o Choice Regiona
Slide 27: Tenant revenues
TENANT REVENUES Retailer revenues (same-store basis, 2006 = base 100 ) H1 2011 Revenue growth, H1-2011 Same-floor area basis Same-store basis Retail parks and Family Villages + 3.7% + 3.0% Shopping centres + 1.7% + 0.3% Total + 2.4% + 1.1% CNCC index + 0.3% - 0.6% PRESENTATION OF FIRST HALF RESULTS
Slide 28: Family Village retail parks: a winning format
FAMILY VILLAGE RETAIL PARKS: A WINNING FORMAT Large properties: GLA of up to 60,000 sqm Non-food retailers with mass market position, in city outskirts Simple yet studied architecture with entertainment/leisure component Organised in the same way as a shopping centre Cost of property & logistics 60%
Slide 29: Growth in rental income
GROWTH IN RENTAL INCOME €m Change Net rental income H1 2011 74.7 Shopping centres opened + 5.0 6.7% Disposals (8.3) (11.1%) Acquisitions + 4.0 5.4% Redevelopments (0.8) (1.1%) Like-for-like change + 0.2 0.3% Total change in net rental income + 0.2 0.3% Net rental income in H1 2011 74.9 Full-year eff
Slide 30: Property assets: €2.65bn incl. transfer duties
PROPERTY ASSETS: €2.65BN INCL. TRANSFER DUTIES €2,602m €15m (€18m) €55m €2,654m Family Village Shopping centres Disposals Centres under Family Villages 14% opened redevelopment. 17% & change like- for-like Shopping Shopping centres - centres France - France 65% 63% + 2.1%(1) SC International SC 21%
Slide 31: Outlook for 2011-2015: development projects
OUTLOOK FOR 2011-2015: DEVELOPMENT PROJECTS:(1) GLA created Gross rental Centre Project Investment (2) (€m) Yield (m2) income (€m) Family Village Le Mans 2 Creation 19,800 Family Village Aubergenville 2 Extension 11,600 Puget Creation 54,400 La Valette du Var Creation 37,800 Family Village Roncq Cre
Slide 32: Developments: regional shopping centre
DEVELOPMENTS: REGIONAL SHOPPING CENTRE Villeneuve la Garenne 4km north-west of Paris 86,000 sqm net floor area 150 stores Located near major roads Investments of €234m for 100%; Altarea: 50% Opening scheduled at end- 2013 Letting > 50% Launch of construction PRESENTATION OF FIRST HALF RESULTS – 29 J
Slide 33: Developments: Family Villages
DEVELOPMENTS: FAMILY VILLAGES Investments: €94m Les Hunaudières - south-east of Le Mans (63,000 Nîmes Costière - south of Nîmes sqm after extension) 34,000 sqm extension Creation (28,500 sqm) Opening scheduled in 2013 Opening scheduled in early 2013 Approved projects PRESENTATION OF FIRST HALF RESUL
Slide 34: Outlook for 2011
OUTLOOK FOR 2011 Continuing capital rotation strategy (reduction in number of assets) Investment focused on large shopping centres and retail parks Operating organisation: allocation of additional resources (extensions, developments) PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 34
Slide 35: 2011 – 2015: significant evolution of the portfolio
2011 – 2015: SIGNIFICANT EVOLUTION OF THE PORTFOLIO Before 2009 2010 / 2013 2013 / 2015 Development Redeployment Development 2015 Objectives High growth toward Creations Large programmes various formats completion 48 assets as of 2009 Refurbishments 30 to 35 assets Average per asset value: €50 milli
Slide 36: Finances
FINANCES PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 36
Slide 37: Recurring net profit
RECURRING NET PROFIT €m / IFRS H1 2011 H1 2010 % Shopping centres 64.1 66.9 Residential property development 38.5 18.7 Office property development (0.1) 4.4 Recurring operating profit 102.6 90.0 + 14% Cost of net debt (38.5) (34.8) Other 2.3 4.1 Recurring net profit 66.4 59.3 + 12% Change in value a
Slide 38: NAV per share: up 5.3%
NAV PER SHARE: UP 5.3%(1) Change in Recovery value of Other NAV/ of value - NAV/ Recurring shopping Cogedim Share Dividend centres 0,6€ Share profit 4,0€ (8,0€) 4,5€ 146,7 € 6,3€ 139,3€ + 5,3% Dec Déc 2010 2010 June 2011 Juin 2011 (1) Diluted going-concern NAV after financial instruments and non-SII
Slide 39: Consolidated net debt
CONSOLIDATED NET DEBT Net debt at 30 June 2011: €2,071m Maturity schedule (excluding property Mortgage Retail property debt development) Dette debt hypothécaire 51% Nominal in €m Dette Corporate corporate debt Dette 31% acquisition Cogedim Development Dette 11% debt promotion 7% Consolidated Covenan
Slide 40: Conclusion
CONCLUSION PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 40
Slide 41: 2011 guidance confirmed
2011 GUIDANCE CONFIRMED Property development (Residential/Office property): Revenue target > €900m Retail property segment: consolidation of rental income Annual growth in recurring net income: well above 10% LTV target: 50% / 52% PRESENTATION OF FIRST HALF RESULTS – 29 July 2011 - 41
Slide 42: A unique business model
A UNIQUE BUSINESS MODEL Office 189.8 2011 - 2012 2015 Objectives Residential 178.7 Retail 161.8 Business Capture all value from recovery our advanced technology 123.6 Double Market share revenue around 6% (in value) 55.1 36.0 Consolidation Complete large phase of rents programmes 2005 2006 2007 2008
Slide 43: Interim Results 2011
INTERIM RESULTS 2011 RETAIL RESIDENTIAL OFFICES