Vonovia Se · XETR:VNA
Vonovia — Deutsche Annington Immobilien — Investor Day (June 2015)
45 slides from Vonovia's investor day presentation, Jun 15, 2015
Slide 1: Capital Markets Day: Meet the management
Deutsche Annington Immobilien SE Capital Markets Day “Meet the management” Berlin, June 15-16, 2015 © Deutsche Annington Immobilien SE Capital Markets Day, June 15-16, 2015
Slide 2: Disclaimer – Confidentiality Declaration
Disclaimer – Confidentiality Declaration This presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of Deutsche Annington Immobilien SE (“DA”) or any of its subsidiaries
Slide 3: Capital Markets Day 2015 – Agenda Day 2
Capital Markets Day 2015 – Agenda Day 2 09:00 – 10:00 CEO Presentation + Q&A 10.15 – 12:30 Round Table Meetings 13:30 – 13:30 Lunch 13:30 – 15:45 Round Table Meetings Extension: Klaus Freiberg (COO), Konstantina Kanellopoulos (Head of Product Management) Process & IT Management: Thomas Zinnöcker (De
Slide 4: Four engine blocks and a turbo
Four engine blocks and a turbo Reputation & customer satisfaction Engineering the next generation 1 in German residential real estate Traditional Property Optimise EBITDA by increasing rent, reducing management 5 strategy vacancy, reducing operating cost, adequate maintenance • Engine blocks 1 & 2
Slide 5: Extension Strategy continuously creates value with innovative businesses
Building on a strong real estate platform, our Extension Strategy continuously creates value with innovative businesses Heat Roof Building Energetic moderni exten- kiwi moderni- -sation sion park sation ing Intelligent DHL Sourcing Flat Bath- AAL Apartment moderni- room Kitchen sation mod. Meterin g
Slide 6: TGS – insourcing and holistic management of value chain
TGS – insourcing and holistic management of value chain allows for significant cost reductions Optimisation by disassembly of building works and repairs Addressable volume Margin + value > €400m Staff Material added tax Decomposition of craftsmen tasks Examples: windows, balconies and finding new di
Slide 7: Re-thinking the supply chain: direct sourcing of windows
“Re-thinking” the supply chain: direct sourcing of windows from a CEE/SEE sub-manufacturer Direct sourcing of windows Insights Deconstruction of the current process Current Process Future Process Understanding the supply market and production industry 1. Measurement Measurement (external) (inter
Slide 8: Roof conversion / extension at competitive cost
Roof conversion / extension at competitive cost offers win-win situation for our tenants and us Project example Insights Frankfurt: Construction of approx. 1,100 m² Standardized conversion or extension with pre- additional rental space resp. 20 residential units fabricated elements in compliance
Slide 9: Process and IT management is an enabler for service extension
Process and IT management is an enabler for service extension and fast integration of acquired portfolios Housing Management & Customer Service STAKEHOLDER LOCAL Housing FINANCIAL SUCCESS Management Letting CENTRAL PRODUCTIVITY Billing of Facility Service Charges Management Telephonic Smart Customer
Slide 10: Value drivers for sustainable long-term growth
Value drivers for sustainable long-term growth • Proactive portfolio optimization with a clear-cut view on all local markets and properties Focused & guarantees best possible strategy for every single asset action-driven portfolio • Modernizations as attractive value drivers (7% unlevered yield) man
Slide 11: Portfolio offers potential for yield compression
Our German wide portfolio offers potential for yield compression at primary as well as secondary locations Internal property valuation Overview of DA’s prime and secondary locations • Fair value growth of 3.7% p. a. since 2010 based on a DA’s diversified portfolio spread across Germany • Sustainable
Slide 12: Innovative financing structure
Innovative financing structure Innovative financing strategy implemented First German real estate company .. .. with an investment grade rating (S&P: BBB) in July 2013 (subsequently upgraded to BBB+) .. issuing investment grade rated unsecured corporate bonds in July 2013 .. issuing of USD 1.0
Slide 13: Full pipeline of opportunities
Full pipeline of opportunities DAIG with strong track following disciplined approach Deutsche Annington and GAGFAH with strong Acquisition Deal Pipeline 2015 ytd track record in 2014 Number of residential units in `000 Total # of transactions of residential real estate portfolios in 2014 (≥100 units
Slide 14: Disciplined approach to buy high quality portfolios
Disciplined approach to buy high quality portfolios Purchase Price Factor Recent Transactions (>1,000 units) 20.0 20.0 20x 1.0 Sales multiple (estimate) 1.4 Offer multiple (DAIG) 18.1 17.9 0.0 0.9 17.0 1.3 15.0 15x 1.0 18.6 19.0 17.9 17.2 15.7 14.0 10x Project A Project B Project C SÜDEWO Project D
Slide 15: Acquisitions further improve portfolio quality
Acquisitions further improve portfolio quality Total Return Matrix Vonovia (370K) Deutsche Annington (171K) DeWAG (11K) Vitus (20K) Franconia (4K) GAGFAH (143K) SÜDEWO (20K) Expected value growth in % Market (Top 100 cities) Current return in % © Deutsche Annington Immobilien SE 15 Capital Markets D
Slide 16: Summary
Summary Our extension business provides a full pipeline of innovative projects that deliver sustainable value creation for all stakeholders. Our innovative process and IT management is an important and unique enabler for our service extension and the fast integration of acquired portfolios. We
Slide 17: Appendix: Slides for Round Table Meetings
Appendix Slides for Round Table Meetings: Extension (pages 18-23) Process and IT management (pages 25-29) Financing (pages 31-37) Portfolio Management & Valuation (pages 39-44) © Deutsche Annington Immobilien SE 17 Capital Markets Day, June 15-16, 2015
Slide 18: Using industry proven methods: a balcony is just a high bay racking
Using industry proven methods and materials in real estate: a balcony is “just” a high bay racking Intelligent Sourcing Usage of industry standard materials Insights Decomposition of current elements High bay racking with additional beams Simplification of planning and sourcing Modular desig
Slide 19: Bathroom program highly accepted by customers
Our bathroom program is highly accepted with our customers and provides above target margins Bath- room mod. Bathroom modernization on customer request Insights Bathroom product meets strong customer Fixed price agreement with TGS allows for an demand easy and reliable service offering to our cu
Slide 20: Adapting service offerings: built-in kitchens
Adapting successful service offerings for new products, e.g. built-in kitchens on customer demand Kitchen Built-in kitchens Insights Response to market demand – “next step” after Creation of additional value by: the bathroom project Standardisation of products and processes Expansion of the in
Slide 21: Smart sub metering – a promising pilot project
Smart sub metering – a promising pilot project Sub metering Smart Sub Metering Insights Roll-out of real-time sub metering business Measuring of consumption of Water and Heat planned (Sub-Metering) Creation of a win-win situation for tenants and ‘Smart’: Utilize intelligent online Metering D
Slide 22: Technical tools to support tenants in everyday life
Technical tools to support tenants in everyday life AAL Ambient assisted living Insights Ambient assisted living – convertible without Safety: huge building effort “warning light: can I leave the apartment? Are the Small and clever solutions, can increase windows closed? Is the stove turned off?
Slide 23: Extension Pool provides additional ideas for future services
Our Extension Pool provides additional ideas for future service offerings Proof of concept Standard front door key system extended by electronical closing system: “hands-free” door-opening Optional usage of “kiwi” by tenants for a small fee Service Provider (Alba, Post, DHL, etc.) get access t
Slide 24: Appendix: Slides for Round Table Meetings
Appendix Slides for Round Table Meetings: Extension (pages 18-23) Process and IT management (pages 25-29) Financing (pages 31-37) Portfolio Management & Valuation (pages 39-44) © Deutsche Annington Immobilien SE 24 Capital Markets Day, June 15-16, 2015
Slide 25: The letting process as example of process improvement
The letting process serves as example to explain process improvement through technology Traditional process 1 Marketing 2 Preliminary contact 3 Viewing appointment 4 Check customer records and select new tenant 2 – 3 days ca. 14 days ca. 14 days 8 Apartment handover 7 Data management 6 Conclusion of
Slide 26: Optimized letting process based on SAP and Digital-Pen
The Deutsche Annington optimized letting process – based on SAP and Digital-Pen 1 Marketing 2 Viewing appointment 3 Dispatch contract offer to customers max. 3 days 24 hours ca. 5 days 6 Apartment handover 5 Select tenant and 4 Return shipment of dispatch signed contract documents contract to new te
Slide 27: Optimized letting process from 2015 based on SAP and iPad
The Deutsche Annington optimized letting process – from 2015 based on SAP and iPad 1 Marketing 2 Viewing appointment 3 Dispatch contract offer to customers max. 3 days 24 hours ca. 5 days 6 Apartment handover 5 Select tenant and 4 Return shipment of dispatch signed contract documents contract to new
Slide 28: Hub-and-spoke strategy for the letting process
Hub-and-spoke strategy for the letting process including the Caretaker and the Craftmen functions Letting Agent SAP-ERP 3 Collecting customer information within digital fields 1 Start of process 4 Editing of apartment exposés on-site 2 Creation of tickets / work assignments iPad iPad Plattform platf
Slide 29: Standardized scalable platform for all field workers
Extension of hub-and-spoke strategy: Standardized scalable platform for all field workers Caretaker SAP-ERP 1 Start of process 2 Creation of tickets / work assignments Craftsmen 5 Archiving collected data and ordering results iPad iPad Plattform platform iPad Plattform „Easysquare“ Start of follow-u
Slide 30: Appendix: Slides for Round Table Meetings
Appendix Slides for Round Table Meetings: Extension (pages 18-23) Process and IT management (pages 25-29) Financing (pages 31-37) Portfolio Management & Valuation (pages 39-44) © Deutsche Annington Immobilien SE 30 Capital Markets Day, June 15-16, 2015
Slide 31: Key success factors for efficient financings
Our key success factors for efficient financings USP Success factor • All financial strategic decision have been Execution of best-in-class financial delivered over recent years, from strategy restructuring, rein • All refinancings at least six month prior to Highly experience team with different ma
Slide 32: DAI executed a clear financial strategy
Our key success factors for efficient financings DAI executed a clear financial strategy 1 Lower LTV into target zone 2 Obtain Investment Grade rating 3 Establish unsecured financing instruments 4 Extend and balance maturities 5 Increase unencumbered assets 6 Tackle maturities between 6 an
Slide 33: DAI's successful Rating Upgrade
Our key success factors for efficient financings DAI’s successful Rating Upgrade 1 2012 & 2013 refinancing GRAND CMBS securitisation, repayment of portfolio loan 2013 Obtain Investement Grade rating of “BBB” long-term corporate credit rating from S&P* 2 Deutsche Annington Immobilien SE goes public
Slide 34: Superior (Re)financing
Superior (Re)financing DAI has constantly tackled maturities at least 12 months before, which prevents blackmailing and allows creation of competition financing offers to reduce capital costs Maturity Management since 2013 GRAND A&E (1) (€3.8bn) X Term Loan 2013 (€2.5bn) X Term Loan 2014 (€475m) X W
Slide 35: Track Record Highlights
Track Record Highlights Unsecured financing strategy fully established in just 12 month time: #2 in European Real Estate Bond Market today Refinancing risk eliminated and maturity profile smoothened No refinancing until 2016 Gagfah Takeover created additional refinancing needs in 2017-2019 Most di
Slide 36: Maturity profile offers further headroom for improvement
Maturity profile offers further headroom for improvement Maturity profile is an opportunity 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 from 2027 Mortgages Structured Loans Bond Hybrid (Debt, NC 5) Hybrid (Equity, NC 7) CMBS
Slide 37: Key success factors: Front, Middle and Back Office
Our key success factors for efficient financings Front Office Middle Office Back Office Cash and Liquidity Finance/Capital Risk Controlling Administration Management Markets and Funding • Cash Management • Leader of deal-teams • Calculation of market • Administration of • Account clearing • Negotiat
Slide 38: Appendix: Slides for Round Table Meetings
Appendix Slides for Round Table Meetings: Extension (pages 18-23) Process and IT management (pages 25-29) Financing (pages 31-37) Portfolio Management & Valuation (pages 39-44) © Deutsche Annington Immobilien SE 38 Capital Markets Day, June 15-16, 2015
Slide 39: State-of-the-art property valuation at Deutsche Annington
State-of-the-art property valuation at Deutsche Annington Experienced team of five internal valuers Valuation Tool: State-of-the-art tools with several well-integrated Professional databases and professional Excel front end team Sound DCF-model to value Deutsche Annington’s 12k and tools valua
Slide 40: Valuation level in line with listed competitors
Valuation level of Deutsche Annington in line with listed competitors Portfolio and valuation key figures Comments 2014 • Fair value growth of 3.7% p. a. since 2010 based on Key figures Deutsche DA1 LEG a diversified portfolio spread across Germany: Wohnen 75% of DA’s portfolio is located in 70 #
Slide 41: Yield compression extended to secondary locations
Extension of yield compression to secondary locations opens the chance for further enhancement of DA fair values Yield compression in 22 prime locations in 2014 Overview of DA’s prime and secondary locations • Together with CBRE, 22 locations in Deutsche Annington portfolio were identified with pric
Slide 42: SÜDEWO Group enhances exposure to a healthy region
SÜDEWO Group enhances Deutsche Annington’s exposure to one of the healthiest regions in Germany Baden-Württemberg is one of the strongest and most diverse economic areas in Germany Economic growth rate 2014 of 2.4% higher than national average of 1.6%; GDP per capita 40% higher than EU average P
Slide 43: Footprint in key growth areas in Southern Germany increased
Footprint in key growth areas in Southern Germany materially increased Geographical split of combined portfolio SÜDEWO Group contribution to Baden-Württemberg (“BW”) SÜDEWO Group units in BW (#): 18.8k 15.1% 5.0% Pre SÜDEWO Group Hamburg Schleswig-Holstei n 13.2% Units (#): 11,005 FV (€m): 930 Units
Slide 44: SÜDEWO Group acquisition to enhance strategic portfolio
SÜDEWO Group acquisition to further enhance strategic portfolio Portfolio Management Strategy Portfolio Breakdown 1 Value-driven asset management approach in Deutsche Annington SÜDEWO Group Combined locations with above-average development potential 345.6k 100% 19.8k 100% 365.4k 100% 17.6k 3% 17.6k
Slide 45: IR Contact & Financial Calendar
IR Contact & Financial Calendar Contact Financial Calendar 2015 Investor Relations March 5 Full year results 2014 April 30 Annual General Meeting Deutsche Annington Immobilien SE Philippstraße 3 June 01 Interim report Q1 2015 44803 Bochum, Germany June 15-16 Capital Markets Day Tel.: +49 234 314 160
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