Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — Q1 2018 Earnings Presentation
34 slides from Grand City Properties Sa's earnings presentation, May 2018
Slide 1: Presentation of the Financial Results for Q1 2018
Cologne Mannheim Duisburg PRESENTATION OF THE FINANCIAL RESULTS FOR Q1 2018 MAY 2018 Essen Berlin Bremen Hannover
Slide 2: Table of Contents
Table of Contents 1 Highlights 2 Financial and Portfolio performance 3 ESG Outperformer 4 Guidance 5 Appendix 2
Slide 3: Highlights
1 HIGHLIGHTS Strong top Rental and Net rent Profit EPS (Basic) and bottom operating income €90 million €132 million €0.71 line results €132 million Increasing FFO I per share FFO I per share 65% of FFO I FFO I after perpetual notes operational €0.30 attribution dividend yield €49 million results (FF
Slide 4: Profit & Loss
2 PROFIT & LOSS Selected Income Statement Data 1-3/2018 1-3/2017 NET RENTAL INCOME (IN € MILLIONS) € ‘000 Revenue 132,688 118,697 361 Rental and operating income 132,438 117,957 328 Net rent 90,155 78,872 285 CAGR 2015 - Mar 2018 Capital gains, property revaluations and other 220 income 117,809 54,7
Slide 5: FFO
2 FFO 1-3/2018 1-3/2017 FFO I (IN € MILLIONS) € ‘000 Guidance range €196m-€201m Adjusted EBITDA 67,758 59,530 198 Finance expenses (11,412) (9,610) 178 Current tax expenses (6,468) (7,466) 160 Contribution from minorities (417) (440) CAGR FFO I 49,461 42,014 128 2015 - Mar 2018 Result from disposal
Slide 6: EPRA NAV
2 EPRA NAV Mar 2018 Dec 2017 EPRA NAV (IN € MILLIONS) € ‘000 Per share € ‘000 Per share Equity per the financial statements 3,963,768 3,849,662 EPRA NAV 4,131 EPRA NAV Incl. perpetual notes 3,993 Equity attributable to perpetual notes investors (669,259) (665,871) 3,327 3,461 Equity excluding perpet
Slide 7: Investment Property
2 INVESTMENT PROPERTY INVESTMENT PROPERTIES (IN € MILLIONS) ACQUISITION CRITERIA 6,388 6,439 Acquisition in densely populated areas and major cities High cash flow generating assets CAGR 4,796 +26% Vacancy reduction potential Rent level per sqm is below market level (under-rented), 3,858 upside pote
Slide 8: Portfolio Distribution
GB 2 PORTFOLIO DISTRIBUTION DISTRIBUTION BY VALUE MARCH 2018 London Hamburg Bremen Berlin Hannover NRW Halle Leipzig Dresden Frankfurt Nuremberg/ Mainz Fuerth Kaiserslautern Mannheim Focus on value-add opportunities in densely populated Munich areas in Germany 8
Slide 9: Portfolio Overview
2 PORTFOLIO OVERVIEW Diversification among areas of sustainable economic fundamentals and demographic prospects PORTFOLIO OVERVIEW MARCH 2018 Value Area EPRA Annualized net In-place rent Number of units Value per sqm Rental yield (in €M) (in k sqm) Vacancy rent per sqm (in €) (in €M) (in €) NRW 1,85
Slide 10: Best in Class Berlin Portfolio - March 2018
2 BEST IN CLASS BERLIN PORTFOLIO - MARCH 2018 Berlin is the single largest city in the portfolio… PORTFOLIO OVERVIEW BERLIN 24%* of GCP’s Portfolio Berlin - Friedrichshain Berlin - Charlottenburg Berlin - Mitte Berlin – Prenzlauer Berg QUALITY LOCATIONS IN TOP TIER NEIGHBORHOODS OF BERLIN* 2/3 of th
Slide 11: Portfolio NRW - March 2018
2 PORTFOLIO NRW – MARCH 2018 …and GCP is well positioned in Germany’s largest metropolitan area… PORTFOLIO DISTRIBUTION* 29%* POPULATION DENSITY IN NRW of GCP’s Portfolio Essen Cologne Gelsenkirchen Dortmund Duisburg 11 * by value
Slide 12: Portfolio East and North - March 2018
2 PORTFOLIO EAST AND NORTH - MARCH 2018 …with further diversification in Germany’s fast growing Eastern and largest Northern cities EAST PORTFOLIO* NORTH PORTFOLIO* 15%* 7%* of GCP’s of GCP’s Portfolio Portfolio Halle Dresden Leipzig Halle Hamburg Hannover Bremen 12 * by value
Slide 13: Financial Policy
2 FINANCIAL POLICY GCP financial policy Strive to achieve A- global rating in the long term LTV limit at 45% Debt to debt plus equity ratio at 45% (or lower) on a sustainable basis Maintaining conservative financial ratios with a strong ICR Unencumbered assets above 50% of total assets Long debt mat
Slide 14: Loan-to-Value
2 LOAN-TO-VALUE Mar 2018 Dec 2017 € ‘000 Investment property 6,479,221 6,425,430 COST OF DEBT Assets held for sale 302,620 117,246 Low spreads Equity accounted investees 36,424 37,261 Series D 2021 0.24% Total value 6,818,265 6,579,937 1.6% Series E 2025 0.87% Total Debt 3,424,062 2,795,675 Perpetua
Slide 15: Capital Structure
2 CAPITAL STRUCTURE HEDGING STRUCTURE FINANCING SOURCE MIX 99% 14% 13% 12% Bank Debt Hedged 21% 30% 29% Straight Bond 7% Convertible 3% 3% 58% 54% 56% Equity Dec 2017 Mar 2018 Pro-forma Mar 2018* * including €350 million perpetual notes issued in April 2018 MATURITY SCHEDULE ø approx 8.3 Years 15
Slide 16: Financing
2 FINANCING CAPITAL MARKET ACTIVITY SUPPORTING EFFECTIVE DEBT MANAGEMENT Continuously tapping the capital markets with €1.2 billion raised in 2018 year-to-date: Issuance of €350 million perpetual notes in April 2018 at a coupon of 2.5% GCP’s lowest perpetual notes coupon yet Issuance of Hong Kong do
Slide 17: Debt Coverage and Credit Rating
2 DEBT COVERAGE AND CREDIT RATING COVER RATIOS - Q1 2018 UNENCUMBERED ASSETS 5.9x €4.3 BN €4.1 BN 5.0x 64% of 64% of value value €2.8 BN €2 BN 56% of value 53% of value ICR* DSCR** Dec Dec Dec Mar *) Adjusted EBITDA / interest **) Adjusted EBITDA / (interest + loan amortization) 2015 2016 2017 2018
Slide 18: Maintenance, Capex and Modernization
2 MAINTENANCE, CAPEX AND MODERNIZATION GCP invested 0.5€/sqm in Q1 2018 resulting in CAPEX STRATEGY 0.5% L-F-L in-place rent growth Repositioning capex: Modernization: Aimed at increasing property Aimed at improving standards of Improve asset attractiveness Increase Rent quality and support value th
Slide 19: ESG - Outperformer
3 ESG - OUTPERFORMER In April 2018, GCP published its first sustainability report, demonstrating the Company’s commitment to sustainability by presenting to investors, business partners, employees and other stakeholders its activities and achievements and to embed the high ESG criteria of the Compan
Slide 20: 2018 Guidance confirmed
4 2018 Guidance confirmed Q1 2018 FY 2018e annualized FFO I (in € million) 198 196-201 FFO I per share (in €) 1.20 1.19-1.22 Dividend per share (in €) 0.78 0.77-0.79 Rent like-for-like growth 3% Over 3% LTV 37% <40% Continuous FFO I growth, should result in further value creation and in return in EP
Slide 21: Appendix
5 APPENDIX 21
Slide 22: Portfolio Potential
5 PORTFOLIO POTENTIAL RESIDENTIAL IN-PLACE RENT COMPARED TO MARKET RENT CURRENT ANNUALIZED NET RENTAL INCOME VS MARKET POTENTIAL 452 348 85% 15% Below market level at market level March 2018 Run-Rate Annualized market potential * including vacancy reduction 6% of units 11 years subject to rent restr
Slide 23: Proven Ability to Access Capital Markets
5 PROVEN ABILITY TO ACCESS CAPITAL MARKETS Apr-18 Issuance of €350 million perpetual notes, coupon of 2.5% p.a. Feb-18 Tap issuance of Series H, 2032 straight bonds of € 145m to an aggregate nominal amount of €255m Strong start in 2018, issuing Feb-18 Issuance of Series K, 2026 straight bonds of CHF
Slide 24: Analyst Coverage
5 ANALYST COVERAGE ANALYST RESEARCH TARGET PRICE GCP‘s operations are researched by leading real estate market analysts, who Key Index inclusions: conduct independent equity research and target price recommendations MDAX FTSE EPRA/NAREIT Global Developed Europe Developed Eurozone Germany
Slide 25: Share Development and Structure
5 SHARE DEVELOPMENT AND STRUCTURE SHARE PRICE AND TOTAL RETURN SINCE FIRST EQUITY PLACEMENT (19.7.2012) Share Price Since First Equity Placement (19.7.2012) SHARE PRICE/CONVERSION PRICE SHARE OWNERSHIP STRUCTURE THROUGHOUT THE COMPANY’S ISSUANCES Basic amount of shares: 164.8 million/ Fully diluted
Slide 26: Tightening Bond Spreads
5 TIGHTENING BOND SPREADS STRAIGHT BOND SERIES D SPREAD OVER MID-€-SWAP, REMAINING 3.5 YEARS STRAIGHT BOND SERIES E SPREAD OVER MID-€-SWAP, REMAINING 7 YEARS 3.75% PERPETUAL NOTES SPREAD OVER MID-€-SWAP 26
Slide 27: Management
5 MANAGEMENT CEO Christian Windfuhr Mr. Windfuhr is Grand City Properties’ CEO. Before joining Grand City Mr. Windfuhr served as CEO of Maritim Hotels, with 40 hotels in Germany. Prior to this he served as CEO of Mövenpick. He achieved the financial turnaround of Mövenpick, drove international expan
Slide 28: Management
5 MANAGEMENT Senior Management (continued) Uwe Schillinger Mr. Schillinger is GCP’s Director for Technical Service and responsible for the Facility Management. He has 12 years experience in facility management Head of Facility Management and joined GCP in 2006. Mr. Schillinger is an engineer in elec
Slide 29: Credit Rating Matrix
5 CREDIT RATING MATRIX 1 2 3 4 5 6 Min Modest Aggre- High - Intermediate Significant ssive Lever- imal aged 1 aaa Excellent bbb- / aa a+/a a- bbb GCP will continue /bb+ aa+ strengthening its position within the business profile Business risk profile 2 aa/ (Aroundtown) (Vonovia- BBB+)* Strong aa- a+/
Slide 30: Maintaining Strong and Diverse Financing Sources
MAINTAINING STRONG AND DIVERSE 5 FINANCING SOURCES GCP HAS MORE THAN 50 NON-RECOURSE SEPARATE BANK LOANS FROM AROUND 20 BANKS REVOLVING CREDIT FACILITIES Strong corporate credit lines All credit facilities do not with international banking have a Material Adverse leaders of approx. €100 Change (MAC)
Slide 31: Hannover Mannheim Berlin
Hannover Mannheim Berlin Dresden Essen Duisburg Leipzig Hamburg Berlin 31
Slide 32: Cologne Berlin Halle
Cologne Berlin Halle Gelsenkirchen Leipzig Berlin Berlin Frankfurt am Main Nuremberg 32
Slide 33: Berlin Leipzig Munich
Berlin Leipzig Munich Bremen Wuppertal Dortmund 33
Slide 34: Contact
5 CONTACT Katrin Petersen Head of Communications E-mail: katrin.petersen@grandcity.lu www.grandcityproperties.com DISCLAIMER IMPORTANT: This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordanc
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