Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — H1 2012 Earnings Presentation
47 slides from Altarea Sca's earnings presentation, 2012
Slide 1: 2012 Half-Year Results
2012 HALF-YEAR RESULTS 3-DIMENSIONAL REAL ESTATE www.altareacogedim.com
Slide 2: Contents
CONTENTS 1. Introduction 2. Residential 3. Offices 4. Retail 5. Finance 6. Outlook 2012 HALF-YEAR RESULTS 2
Slide 3: Introduction
INTRODUCTION 2012 HALF-YEAR RESULTS 3
Slide 4: H1 2012 Results
H1 2012 RESULTS Like-for-like SALES €728 m +50% +23% FFO (1) €74 m +13% +17% Per share €6.93 +12% +17% NAV (2) €1,509 m +0.7% (4) Per share (3) €138.3 -6% (4) LOAN-TO-VALUE (5) 50.2% -100bps (1) Fund From Operations: result before changes in value and estimated expenses (2) NAV of ongoing business:
Slide 5: Altarea Cogedim operates on the 3 main property markets
ALTAREA COGEDIM OPERATES ON THE 3 MAIN PROPERTY MARKETS RETAIL RESIDENTIAL OFFICES Innovation as a performance driver The 1st Multi-channel Recurring revenues & Retail REIT added value 2012 HALF-YEAR RESULTS 5
Slide 6: H1 2012 Highlights
H1 2012 HIGHLIGHTS • Strong sales growth: +31% to €451 million RESIDENTIAL • Reservations: -32% to €420 million in a highly hesitant market • Backlog at €1.5 billion, or 20 months of revenue • AltaFund carried out its first investment, located on Boulevard OFFICES Raspail in Paris' 6th arrondissemen
Slide 7: Sustainable Development Indicators
SUSTAINABLE DEVELOPMENT INDICATORS • Altarea Cogedim's sustainable development approach: surging position in the Novethic ranking (Caisse des Dépôts subsidiary) 2009 2012 Ranking of property developers Property developers: Property developers: Development and sale of Development and sale of real est
Slide 8: Residential
RESIDENTIAL “Homes for everyone“ 2012 HALF-YEAR RESULTS 8
Slide 9: Residential: Main Results
RESIDENTIAL: MAIN RESULTS SALES (EXCL. TAX) €451 m +31% OPERATING CASH FLOW €45.4 m +15% ⇒ 20 months of revenue BACKLOG (EXCL. TAX) (1) €1,527 m -6% (excl. tax) ⇒ Significant Sales’ growth (+31%) thanks to Cogedim's market share gains over the past three years (1) Backlog: Revenue (excl. VAT) from n
Slide 10: French Housing Market
FRENCH HOUSING MARKET • Declining sales and construction start in a somber Slackening macroeconomic and tax environment sales > Reduction of tax benefits (Scellier, etc.) • A pronounced wait-and-see attitude tied to election season Facing a structural housing shortage of 1 million homes: Options for
Slide 11: Preserving market shares in a market down 30%
PRESERVING MARKET SHARES IN A MARKET DOWN 30% (1) H1 2012 reservations €617 million -32% €420 million -21% -55% H1 2011 H1 2012 Block reservations Individual reservations • 36% drop in commercial launches, at €436 million • Maintaining Cogedim market shares at around 5.5% of the French market thanks
Slide 12: Risk Control & Offering Management
RISK CONTROL & OFFERING MANAGEMENT €650 MILLION OF PROPERTIES FOR SALE (1) AT JUNE 30, 2012 PREPARATION LAND ACQUIRED / LAND ACQUIRED / Stock of completed (land not Construction not Construction in residential acquired) begun progress properties €201 m (31%) €432 m (67%) €16 m (2%) 1 M€ (n.s.) o/w €
Slide 13: Our Strategy
OUR STRATEGY • An extended product range to cover the various market segments • A strategy founded on brand capital, multi-channel customer approach and innovation • A substantial pipeline of €3.8 billion (1) New High-end Mid-range Entry-level Cogedim Club neighborhoods ⇒ Strengthening our offering
Slide 14: "Manhattan" Project, Saint-Ouen
“MANHATTAN” PROJECT, SAINT-OUEN A “PRIX MAITRISÉS” (1) PROGRAM • Click to edit Master text styles • Marketed primarily to people living and working in Saint-Ouen • 186 homes at around €4,500/m² prices (“prix maîtrisés” ) • Located on the banks of the Seine and surrounded by landscaped grounds • Qual
Slide 15: Offices
OFFICES “Comprehensive expertises to serve our clients“ 2012 HALF-YEAR RESULTS 15
Slide 16: Offices: Main Results
OFFICES: MAIN RESULTS STABILITY IN A DIFFICULT MARKET SALES €48.5 m -4% FEES €2.7 m 0% CASH-FLOW OPÉRATIONNEL €1.8 m n/a ⇒ Maintaining a stable business level thanks to our wide range of activities 2012 HALF-YEAR RESULTS 16
Slide 17: French Office Market
FRENCH OFFICE MARKET A MARKET IN SLOW MOTION • Transactions amounted to €5.6 billion in H12012 (+4% increase Investment in one year) market • In a difficult economic climate, investors remain prudent and in France primarily target prime assets and locations Take up & • Take up of approximately 10,75
Slide 18: A full service offering suited to each of our clients
A FULL SERVICE OFFERING SUITED TO EACH OF OUR CLIENTS Mandated Fund Development Management Management Users Investors Asset Development Management Contract Off-plan 2012 HALF-YEAR RESULTS 18
Slide 19: Recent Transactions
RECENT TRANSACTIONS Mercedes-Benz France Euromed Center Rue des Archives Montigny-le-Bretonneux Marseille Paris • Head office of Mercedes-Benz • Property development contract • Property development contract • inClick Franceto edit Master text styles for Prédica/FDR for GE Real Estate • Real estate c
Slide 20: AltaFund
ALTAFUND FIRST RENOVATION PROJECT (BOULEVARD RASPAIL, PARIS) • Click to edit Master text styles • Acquisition of a prime office building of 106,500 ft² (9,900 m²) for renovation > Construction work to bring the property up to environmental standards > Respect of the initial design from the 70s • Fut
Slide 21: Retail
RETAIL “Investing in tomorrow’s retail“ 2012 HALF-YEAR RESULTS 21
Slide 22: Retail: Main H1 Results
RETAIL: MAIN H1 RESULTS 7% GROWTH OF THE OPERATING CASH FLOW NET RENTAL INCOME €73.9 m -1% +4.4% like-for like FEES €9.0 m +48% OPERATING CASH FLOW €70.9 m +7% ⇒ A 7% growth of the operational cash flow, driven by external services for third parties 2012 HALF-YEAR RESULTS 22
Slide 23: French Retail Market
FRENCH RETAIL MARKET DECREASING CONSUMER SPENDING • Considerable uncertainty in the macroeconomic and tax climate Consumer > Households putting off certain major purchases spending fell • Less favorable weather conditions by 0.9% • Several official holidays on weekdays in May • A shift in the retail
Slide 24: An Asset Concentration Strategy
AN ASSET CONCENTRATION STRATEGY BY FORMAT BY REGION BY OFFERING Regional Shopping Centers Entertainment: Areas with strong / Large Retail Parks a cross-cutting population growth in the Family Village® format component reg ⇒ 2015 goal: 30 to 35 assets with average value of more than €100 million 2012
Slide 25: Focusing on Regional Shopping Centers and Large Retail Parks
FOCUSING ON REGIONAL SHOPPING CENTERS AND LARGE RETAIL PARKS 2009 H1 2012 Large Retail Parks (Family Village®) Nearby / downtown shopping centers Regional shopping centers ⇒ Targeted formats already accounts for approximately 75% of the portfolio Distributed on the basis of asset value at 100% 2012
Slide 26: Focusing on Areas with Strong Population Growth
FOCUSING ON AREAS WITH STRONG POPULATION GROWTH 2009 S1 2012 International Paris Region Other PACA / French regions Rhône-Alpes / South ⇒ 2/3 of the portfolio is located in areas with the strongest population growth Distributed on the basis of asset value at 100% 2012 HALF-YEAR RESULTS 26
Slide 27: Focusing on Assets Offering an Entertainment Component
FOCUSING ON ASSETS OFFERING AN ENTERTAINMENT COMPONENT (1) 2009 S1 2012 Others Centers with Entertainment component 35% 46% 54% 65% ⇒ 2/3 of the portfolio already entails an Entertainment component in its retail offering (1) "Entertainment" offering takes a number of forms: movie theatres, restauran
Slide 28: Increase in the Average Size of Assets
INCREASE IN THE AVERAGE SIZE OF ASSETS €70.2 million €67.5 million + 4% €60.2 million Unit value €46.3 million per asset (1) Number of 55 54 49 46 assets (1) Figures at 100% (the average unit value of assets on a Group share basis is €55.1 million, up +3% compared with 2011 and +31% compared with 20
Slide 29: Bercy Village
BERCY VILLAGE (1) THE RETAIL’S LABORATORY • Click to edit Master text styles • Opening of FNAC’s multicanal flagship store, covering 43,000 ft² (4,000 m²) • Arrival of 10 new retailers, 100% new concepts • Outstanding cultural programing (1) 12 million visitors per year, including 20% tourists UGC C
Slide 30: Portfolio & Projects at June 30, 2012
PORTFOLIO &PROJECTS AT JUNE 30, 2012 TRANSFORMATION IN PROCESS PORTFOLIO PROJECTS (2) Value at 100% including €3,229 m Development pipeline (3) €1,455 m transfer duties Group share €2,535 m Group share €855 m Provisional rental income Rental income (at 100%) €200 m €124 m (at 100%) Capitalization ra
Slide 31: Improved Performance of Shopping Centers
IMPROVED PERFORMANCE OF SHOPPING CENTERS Average uplift on Bad debt ratio (1) Financial vacancy rate (2) renewals / re-lettings 2009 2010 2011 H1 2012 2009 2010 2011 H1 2012 2009 2010 2011 H1 2012 • Growth in revenue for shoping center tenants: +0.4% (3) • Increase in occupancy cost ratio to 9.6%, i
Slide 32: Net Rental Income: +4.4% Like-for-Like
NET RENTAL INCOME: +4.4% LIKE-FOR-LIKE Net rental income at June 30, 2011 €74.9 M€ Centers opened €0.1 m +0.1% Disposals (1) €(3.9) m -5.2% Acquisitions - Redevelopments (2) €(0.5) m -0.7% Like-for-like change €3.3 m +4.4% Total change in net rental income €(1.0) m -1.3% Net rental income at June 30
Slide 33: RueduCommerce
RUEDUCOMMERCE INTEGRATION IN ALTAREA COGEDIM GROUP 96.5% success rate at the takeover Carrying out the Multi-channel Retail REIT • Click to edit Master text styles 2012 HALF-YEAR RESULTS 33
Slide 34: Main H1 Results
MAIN H1 RESULTS MARKETPLACE: +20% DISTRIBUTION REVENUE €127.7 m -2% MARKETPLACE REVENUE €51.6 m +20% Marketplace commissions €4.6 m +43% Marketplace average commission rate 8.9% +210bps 2012 HALF-YEAR RESULTS 34
Slide 35: A Leading Site in Terms of Traffic & Visitor Numbers
A LEADING SITE IN TERMS OF TRAFFIC & VISITOR NUMBERS 5 to 8 million unique visitors per month 5.5 million 87% top of mind (44% women, 56% men) customer accounts reputation U.V. per month (1) Sites Business activity 1 Amazon General merchandise, marketplace B2C 12.3 2 Cdiscount General merchandise, d
Slide 36: Multi-channel Retail REIT
MULTI-CHANNEL RETAIL REIT A UNIQUE PROJECT IN THE RETAIL WORLD • A comprehensive distribution offering aimed at retailers, combining an online and offline marketplace to increase business volume > Example: Online "corners," based on the department store model • A geolocation-based marketing & advert
Slide 37: Financials
FINANCIALS “FFO growth & Balance Sheet strengthening“ 2012 HALF-YEAR RESULTS 37
Slide 38: Half-Year Results
HALF-YEAR RESULTS SUMMARY H1 2012 H1 2011 SALES €728.1 m €486.3 m +50% (1) OPERATING CASH FLOW €113.2 m €105.2 m +8% FFO (2) €74.1 m €65.8 m +13% (3) DISTRIBUTABLE NET INCOME €26.2 m €104.9 m -75% (IFRS) AFTER CHANGES IN VALUE (1) +23% on a like-for-like basis (excluding RueduCommerce) (2) Fund From
Slide 39: H1 2012 Sales: +50%
H1 2012 SALES: +50% +23% LIKE-FOR-LIKE (EXCL. IMPACT FROM RUEDUCOMMERCE) Retail In € millions Residential (3) Offices (4) TOTAL Brick&Mortar (1) Online (2) Rental revenues & 80.3 -1% 4.6 +43% 84.9 +1% Marketplace commissions Distribution revenues 127.7 -2% 127.7 -2% Percentage-of-completion 450.9 +3
Slide 40: Operating Cash Flow: +8%
OPERATING CASH FLOW: +8% SUBSTANTIAL WEIGH OF RESIDENTIAL (+15%) In € millions Retail Residential (3) Offices (4) TOTAL Brick&Mortar (1) Online (2) Net rental income & 73.9 4.6 78.5 Marketplace commissions Selling margins for direct 17.0 17.0 sales Net property income 59.1 2.5 61.6 Net overhead expe
Slide 41: FFO Growth: +13%
FFO * GROWTH: +13% In € millions H1 2012 H1 2011 Retail 66.7 66.0 o/w "bricks-and-mortar" retail 70.9 66.0 o/w online retail (4.2) - Residential 45.4 39.5 Offices 1.8 0.2 Others (0.7) (0.6) Operating cash flow 113.2 105.2 +8% Net cost of debt (39.1) (1) (38.9) (1) Debt reduction (-€66 million) Incom
Slide 42: Fully Diluted NAV per Share: €138.3
FULLY DILUTED NAV PER SHARE (1): €138.3 (-6.1%) +2.9% TAKING INTO ACCOUNT THE ACCRETIVE IMPACT RESULTING FROM PAYMENT OF THE DIVIDEND IN SHARES Change in value Change in of financial NAV/share asset value instruments before dividend FFO €1.70 impact NAV/share (€3.4) Other (2) (€2.6) €149.9 Dividend
Slide 43: Consolidated Net Debt
CONSOLIDATED NET DEBT 50,2% LTV, DOWN 100bps SINCE ON DECEMBER 31, 2011 Net debt: €2.015 billion (1) Consolidated covenants / corporate debt (compared with €2.081 billion at 12/31/2011) RETAIL 92% CORPORATE DEBT MORTGAGE DEBT PROPERTY DEVELOPMENT DEBT RESIDENTIAL OFFICES 8% 2009 H1 2010 2010 H1 2011
Slide 44: Outlook
OUTLOOK “Investing on promising markets“ 2012 HALF-YEAR RESULTS 44
Slide 45: Capitalize on our advantages in a challenging economic environment
CAPITALIZE ON OUR ADVANTAGES IN A CHALLENGING ECONOMIC ENVIRONMENT INNOVATION AND PROACTIVITY POWERFULL BRANDS 2012 HALF-YEAR RESULTS 45
Slide 46: 2015 Outlook
2015 OUTLOOK IN A CHALLENGING ECONOMIC ENVIRONMENT • Complete Portfolio transformation (format, region, size) RETAIL • Implement the Multi-channel Retail REIT concept • Gain 6% market share in a rapidly changing market RESIDENTIAL (intensifying mid-range & entry level) • Broaden our range of service
Slide 47: Guidelines for 2012
GUIDELINES FOR 2012 + 10 % FFO GROWTH 2012 HALF-YEAR RESULTS 47