Metrovacesa Sa · BME:MVC
Metrovacesa Sa — FY2018 Earnings Presentation
43 slides from Metrovacesa Sa's earnings presentation, Feb 28, 2019
Slide 1: Results FY2018
Torre del Río (Málaga) Results FY2018 February 28, 2019
Slide 2: Disclaimer
Disclaimer This Presentation neither constitutes nor forms part of any offer for sale or invitation to purchase or subscribe for, or request for an offer of purchase or subscription, of the shares belonging to Metrovacesa, SA (“Metrovacesa”). This Presentation, as well as the information included th
Slide 3: Agenda
Agenda Table of Contents 1. Highlights of the year 2. Financial Overview 3. Business Update 4. Outlook and Positioning 5. Appendix Today’s Presenters Jorge Perez de Leza CEO Borja Tejada CFO Juan Carlos Calvo IR 3.
Slide 4: 1. Highlights of the year
Residencial Nereidas (Torremolinos, Málaga) 1. Highlights of the year
Slide 5: Key figures for FY 2018
Key figures for FY 2018 2018 520 units delivered €201m (7x Revenues prev year) -2% ratio LTV +6.2% LFL GAV residential 3,944 units launched €0.4m Pre-tax profit €-41m Net debt (cash) €18.43/sh NAV (+3% yoy) €64m land sales with 16% 26% Gross developer €46m Net CF generation uplift margin + disposals
Slide 6: 2018 targets accomplished
2018 targets accomplished Target 2018 Actual 2018 Additional information · Deliveries: 520 units · 520 units delivered … 336 units in 4Q18 · Launches: 3,500-4,000 units · 3,944 units launched … On track to meet Residential our BP targets · JV signed with Tishman Speyer … Gain of +12% (57,000 sqm) La
Slide 7: 2. Financial Overview
Gaztelondo Berria (Bilbao) 2. Financial Overview
Slide 8: Profit and Loss Account
Profit and Loss Account Summary P&L (1) (€m) Dec. 17 Dec. 18 Key considerations A Revenues 28.2 200.9 Rev. Development - Res. 23.8 109.5 A • Residential revenues of €110m (520 units delivered - €218k/unit) Rev. Development - Tert. 0.0 27.9 • Commercial development revenues of €28m Rev. Land Sold 0.0
Slide 9: Cash Flow Statement
Cash Flow Statement Summary Cash Flow Statement (€m) Dec. 2017 Dec. 2018 Key considerations EBT (78.1) 0.4 Changes in trade provisions 65.8 1.6 • €96.7m of cash increase during the period Changes in investment properties (1.4) (9.7) • Positive cash flow from operating activities of €34.5m thanks to
Slide 10: Cash Flow statement by activity
Cash Flow statement by activity Project cash flow by source of revenues Cash flow analysis by activity Residential Commercial (€m) (€m) Land sales TOTAL deliveries (1) deliveries (1) Total CF from projects 141 Revenues 110 28 64 201 Overheads (cash) (2) (25) CF from projects 66 18 57 141 Financial e
Slide 11: Balance Sheet
Balance Sheet Summary Balance Sheet (1) Key considerations (€m) Dec. 2017 Dec. 2018 A Investment property (2) 370.6 340.1 A • Book value (inventory + investment property): €2.2bn Other non- current assets 177.3 236.8 • External appraisal value of €2.7bn implies a GAV to BV ratio of 1.2x Total non-cu
Slide 12: Net Debt: €-41.1m at Dec 2018 (net cash)
Net Debt: €-41.1m at Dec 2018 (net cash) Net debt position (1) Key considerations (€m) Dec. 2017 Dec. 2018 Adjusted gross debt 47.5 86.5 • Net debt of -€41.1m (net cash) at Dec2018 Corporate financing 44.5 78.1 · LTV -2% Non current 0.0 73.5 · Following strong cashflow generation, particularly in 4Q
Slide 13: GAV evolution: +6.2% LFL residential growth YoY
GAV evolution: +6.2% LFL residential growth YoY GAV evolution (1) 123 2,626 2,672 (77) LFL+4.7% Residential: +6.2% GAV Dec. 17 LFL change Portfolio changes GAV Dec. 18 (Capex - Sales) Valuation details (2) Levante €/sqm % LFL 2018 14% Center-North Commercial 36% 24% Residential fully-permitted 506 +
Slide 14: NAV & NNAV
NAV & NNAV Equity to NNAV Bridge (€m) GAV to NNAV Bridge (€m) 394 8 2.795 2.688 2.795 2.672 51 34 38 2.688 2.393 (107) (107) Equity (1) Capital Other NAV Tax on capital NNAV GAV Tax credits (2) Net Debt Other assets NAV Tax capital NNAV gains adjustments gains and other Dec.18 & liabilities gains De
Slide 15: Proposed distribution to shareholders
Proposed distribution to shareholders Key considerations • Proposed payment of €50m to shareholders · The Board of Directors has proposed the distribution of €50m against paid-in reserves, to be voted at the next AGM · Estimated to be paid in 2Q2019 · Implies a dividend yield of c.3% at current mark
Slide 16: 3. Business Update
Complejo Pier 1 (Rota, Cádiz) 3. Business Update
Slide 17: Key operational data as of December 31, 2018
Key operational data as of December 31, 2018 5,565 active units €310k/unit 3,840 units and Sales Backlog (2) Business 102 active developments ASP (1) 72 developments under commercialization 909 €271m Sold units €298k/unit ASP (1) 1,329 32 units under developments construction under construction 520
Slide 18: Residential active units: 2018 target accomplished
Residential active units: 2018 target accomplished Active units 2018 # units €m Key considerations 612 266 472 126 348 (9) (17) (17) (67) 1,714 989 • Total active units reached 5,565, with an ASP 5,565 1,662 438 of €310k/unit (36) (75) (73) (386) 855 • 102 active developments, of which 72 2,141 unde
Slide 19: Residential: c.900 units sold in 2018
Residential: c.900 units sold in 2018 888 units sold in 2018, strong Q4 3,840 units under commercialization as of December 31, 24% already sold For sale Sold # units # units % sales over units under commercialization +70% Q4: 405 44% 42% 29% 27% 24% 156 1,222 1,422 2,314 3,137 3,840 +52% Q3: 238 141
Slide 20: Residential: Detail of deliveries in 2018
Residential: Detail of deliveries in 2018 Development Province Municipality Delivery units Mirador San Blas Alicante Alicante 23 Birdie & Falcon Almería Pulpí 62 Gregorio Marañon Almería Almería 104 Locales Sotorebolo Cádiz Algeciras 1 Reserva Sotorebolo Cádiz Algeciras 8 Puerta del Mediterráneo Cas
Slide 21: Residential: Planned deliveries for 2019
Residential: Planned deliveries for 2019 Target License Under Development Province Municipality % sold deliveries 2019 obtained construction Birdie & Falcon Almería Pulpí 79 9% Completed Gregorio Marañon Almería Almería 9 0% Completed Gaztelondo Berría F1 Vizcaya Bilbao 9 22% Completed Mirador de Gu
Slide 22: Residential: Status of deliveries 2019-2021
Residential: Status of deliveries 2019-2021 (1) Year of delivery Target deliveries Launched ASP Forecast Gross Margin- % Units sold Construction licence % Under Deliveries (units) (€ ‘000) (1) Forecast (1) construction Requested Granted 2019 700 100% 242 23% (2) 59% 100% 100% 100% 0% 2020 c 2.600 10
Slide 23: Land Sales: 2018 target surpassed
Land Sales: 2018 target surpassed Development Province Use Buildable sqm Revenues (€m) Gross Margin(1) Gross Margin(1) Uplift on Date (€m) (%) GAV IPO Almogavers Barcelona Office 17,346 22.0 1.0 4% 6% Q2 18 Balius Barcelona Office 9,573 14.0 0.8 6% 13% Q4 18 C/ Marconi, 126 Barcelona Residential 8,0
Slide 24: Land Management FY 18: €117m of land transformed to fully permitted
Land Management FY 18: €117m of land transformed to fully permitted Organized Fully permitted (1) Fully permitted GAV Land plot Region Municipality Buildable sqm Sept. 17 1. Balius Catalonia Barcelona 9,477 74% 2. Can Fábregas Catalonia Mollet del Vallés, Barcelona 11,948 3. Pere IV Catalonia Barcel
Slide 25: Commercial: Turnkey Projects and JVs
Commercial: Turnkey Projects and JVs • 5 assets sold for a total of €57m, implying a 16% revaluation vs. GAV IPO Land Sales • Locations: Madrid, Barcelona, Mallorca and Guadalajara Josefa Valcárcel Turnkey A2 Hotel Silken •9 ,081 sqm office building in Madrid deliveries delivered to Colonial in Sept
Slide 26: 4. Outlook and Positioning
Villas de la Calderona (Bétera, Valencia) 4. Outlook and Positioning
Slide 27: Sector Outlook for 2019
Sector Outlook for 2019 •F avourable outlook for housing demand underpinned by: ·J ob creation and higher disposable income leading to higher purchasing power Housing · Demographics: growth in household formation (+120k annual average) · Affordability ratios still below the historical average (1995-
Slide 28: Sector Outlook: relevant metrics still far from peak levels
Sector Outlook: relevant metrics still far from peak levels Spanish residential metrics in 2018 as a % of peak year (2006-2019) 100% 100% 94% 79% 77% 62% 68% 46% 34% 28% 26% 15% Real Household Employment Transactions Mortgage New mortgage Effort Housing permits Land sales Employment INE MFOM GDP inc
Slide 29: Buying vs Renting comparative exercise
Buying vs Renting comparative exercise Decision Tree - Renting vs Buying in Spain Key considerations 2007 2010 2014 2018 • Buying is economically more attractive than Avg house price in Eur (100 sqm) 205,605 184,303 145,940 161,073 renting at today’s market conditions: 13% cost saving, based on our
Slide 30: Key value drivers: becoming more relevant in today´s market
Key value drivers: becoming more relevant in today´s market A larger land bank: as a competitive advantage NFP land: active management creates value Commercial land: already crystallizing value •N o need to acquire land by 2023: lower • NFP land already reduced to 21% from 26% at IPO; • A vast portf
Slide 31: Unique cashflow generation profile
Unique cashflow generation profile Residential Dev’t (1) Commercial Dev’t (1) Land sales (at run-rate) (at run-rate) (residential & commercial) Potential returns Gross margin (% of sales) ~ 24-26% (2) ~ 21% (2) Project EBITDA margin (% of sales) ~ 20-21% (3) ~ 18% (3) Project FCF generation (% of sa
Slide 32: Targets for 2019 & mid-term
Targets for 2019 & mid-term Target for 2019 Mid-term targets • Run-rate deliveries of c. 4,000 units/year • Deliveries: 700 units • Launches: c. 4,630 units • R esidential land bank size of < 4 years after 2021 Residential vs. > 8 years now • Launch of > 45,000 sqm • Accumulated sales 2019-2022 of €
Slide 33: Closing Remarks
Closing Remarks · Room for growth · Gradually · Very well · Attractive in the residential approching full positioned to shareholder market: speed: benefit from remuneration market dynamics: policy: · Relevant metrics still far ·Higher visibility on ·L and bank: no need to ·W ell supported by from pe
Slide 34: 5. Appendix
Le Mirage III y VI (Estepona, Málaga) 5. Appendix
Slide 35: Geographical capillarity in the right locations for residential projects
Geographical capillarity in the right locations for residential projects Distribution by province according to tier: 8 tier 1 (27%), 14 tier 2 (47%) and 8 tier 3 (27%) Distribution by tier municipality (%GAV dec.18) # units Total portfolio (€ 2.672 m) tier 3 13% tier 1 53% tier 2 34% €m Residential
Slide 36: Xardins de Gaiteira (under project design)
Xardins de Gaiteira (under project design) Key metrics Key highlights Location A Coruña • Three buildings very well located in the Rua Gaiteira, next to the Corte Region Galicia Inglés Units 72 • 70 homes with 1,2,3 and 4 bedrooms. Parking spaces and storage rooms Sqm for sale 8,221 • Unique service
Slide 37: Halia (in commercialization)
Halia (in commercialization) Key metrics Key highlights Location Málaga • Located at a very close distance from the beach, after the three future Region East Andalusia towers that will be the emblematic project of the area Units 99 • Excellent communications with the city center and to the A-7 Sqm f
Slide 38: Residencial Vivaldi (under construction)
Residencial Vivaldi (under construction) Key metrics Key highlights Location Sagunto, Valencia • Sagunto is located close to Valencia. The complex will be just 10 min walk Region Levante to the beach, and close to the center of the town, with many amenities, Units 21 shops, etc Sqm for sale 3,509 •
Slide 39: Rosales Residencial (delivered)
Rosales Residencial (delivered) Key metrics Key highlights Location Villaverde, Madrid • Developed in an open block with a “U” shape, ground floor + 7 + attic. Has Region Center - North a security checkpoint Units 132 • 132 homes of 2, 3 and 4 bedrooms, with access to 2 basement floors Sqm for sale
Slide 40: NFP Land example: Arpo (Pozuelo, Madrid)
NFP Land example: Arpo (Pozuelo, Madrid) Buildable area: 45,000 sqm Pozuelo Madrid # of units: Arpo 256 GAV at IPO: €25m Urbanisation works expected for: 2021 40.
Slide 41: NFP Land case example: La Seda/Papelera (El Prat, Barcelona)
NFP Land case example: La Seda/Papelera (El Prat, Barcelona) Buildable area: 176,000 sqm Barcelona # of units: 1,590 GAV at IPO: rts s Co €50m le e ad Ví G ra n Urbanisation works expected for: 2021 41.
Slide 42: Land Management Q4: Continuous progress in urban management
Land Management Q4: Continuous progress in urban management Development Municipality Region Urban status Date Key Milestones Admission to the application process to initiate the internal 1. Vininal Alboraya, Valencia Levante Developable December rezoning plan 2. La Alborada Benhavís, Málaga East And
Slide 43: Q&A
Render Torre del Río (Málaga) Q&A