Icade Sa · EURONEXT:ICAD
Icade Sa — Icade Sa Ord — H1 2024 Earnings Presentation
57 slides from Icade Sa's earnings presentation, Jul 22, 2024
Slide 1: 2024 Half-Year Results
2024 Half-Year Results Monday, July 22, 2024 EDENN (Nanterre, Hauts-de-Seine)
Slide 2: Disclaimer
DISCLAIMER This document (the “Presentation”) may contain information, opinions and certain forward looking statements that reflect Icade’s management’s current views and expectations with respect to future events and financial and operational performance of the Group. Because these forward looking
Slide 3: Agenda
A G E N DA H1 in a nutshell 1. H1 2024 Operational performance 2. H1 2024 Financial results 3. Debt management 4. FY 2024 Outlook Appendices 2024 Half-Year Results I July 22, 2024 3
Slide 4: H1 in a nutshell: Key messages
H1 in a nutshell Key messages Property Investment: growth supported by well-positioned offices and light industrial revenues ; contained decline in valuations Property Development: operational performance reflecting adjustment to market conditions Balance sheet structure reflecting the absence of di
Slide 5: H1 2024 in a nutshell
H1 in a nutshell H1 2024 in a nutshell NCCF EPRA NAV Debt management Group NCCF NCCF NAV NTA LTV incl. duties Net debt/EBITDA(2) from strategic operations(1) per share ICADE GROUP €169.0m €111.1m €62.6 35.9% 11.4x Stable vs H1 2023 -6.8% (vs 12/31/2023) vs 33.5% (12/31/2023) vs 7.0x (12/31/2023) (€2
Slide 6: CSR deeply embedded in Icade's DNA
H1 in a nutshell CSR deeply embedded in Icade’s DNA 1 1st listed company in Europe to submit two separate resolutions on Climate and Biodiversity Say on Climate resolution approved by Say on Biodiversity resolution approved by 99.3% 98.7% 2 3 Recognized for its energy management expertise Selected a
Slide 7: H1 2024 Operational Performance
H1 2024 1. OPERATIONAL PERFORMANCE PONT DE FLANDRE (Paris, 19th district) 2024 Half-Year Results I July 22, 2024 7
Slide 8: Property Investment
1.1 PROPERTY INVESTMENT ORIGINE (Nanterre, Hauts-de-Seine) 2024 Half-Year Results I July 22, 2024 8
Slide 9: Polarized and quiet leasing and investment markets in France
1.1. Property Investment Polarized and quiet leasing and investment markets in France Leasing market Investment market Paris region Investment volume at €5.9bn (-28%(1)), Slight decrease in take-up with 853,300 sq.m (-5%(1)) and a few a similar trend to other large European markets (-30% to -45%(1))
Slide 10: Good commercial momentum in H1 2024
1.1. Property Investment Good commercial momentum in H1 2024 c.56,000 sq.m €16m 6.3 years 87.2% WALB related to leases signed or signed or renewed Annual headline rental income Financial occupancy rate renewed since January 1, 2024 Solid indicators on: EDENN / Nanterre BRABANT / Pont de 3,700 sq.m F
Slide 11: Change in 2024 lease expiries
1.1. Property Investment Change in 2024 lease expiries Annualised IFRS rental income for Property Investment Division (In €m) • 61% of all break and exit options of H1 2024 non exercised • >€30m of certain annual rent loss in H2 2024, including €10m on Pulse 2024 expiries as Tenant exit & loss No br
Slide 12: €45m of potential rents coming from a selective pipeline
1.1. Property Investment €45m of potential rents coming from a selective pipeline 1 2 3 Limited development pipeline Good visibility on future revenues In line with CSR-focused DNA €907m Started pipeline c.€45m 100% Potential rents, including €21m by end of of projects aiming for HQE / BREEAM with €
Slide 13: On-going diversification with Data Center projects
1.1. Property Investment ReShapE – Accelerate diversification On-going diversification with Data Center projects 1 Equinix Data Center (Portes de Paris Business Park) 2 Hyperscale Data Center (Paris Orly-Rungis Business Park) Key figures Key figures • Investment: c.€32m • Power supply: 130 MW Power
Slide 14: Work-in-progress on to-be-repositioned assets
1.1. Property Investment ReShapE – Adapt office portfolio to new demands Work-in-progress on to-be-repositioned assets 12/31/2023 06/30/2024 IFRS annualized rent(1) €53.1m €48.1m Financial 71.4% 69.3% occupancy rate In % of GAV of Assets To-be-repositioned In 100% + Group share of JVs basis 37% Stud
Slide 15: Effective asset rotation in challenging market
1.1. Property Investment ReShapE – Finance the plan Effective asset rotation in challenging market Preliminary sale agreements(1) of core assets on favourable terms Sale agreements signed for a total of €44.5m Average yield on offices sold 6.0% In line with NAV as of June 2024 Quai de rive neuve / M
Slide 16: Property Development
1.2 PROPERTY DEVELOPMENT PARC INDUSTRIES OR MÉDITERRANÉE – PIOM (Mauguio, Hérault) 2024 Half-Year Results I July 22, 2024 16
Slide 17: Still a challenging market for property development
1.2. Property Development Still a challenging market for property development 1 ➔ Interest rate environment likely to remain persistently high, despite a slight improvement recently (average interest rate of 3.73% in May 2024 compared to 4.20% in December 2023(1)) Challenging ➔ A less favorable tax
Slide 18: Operational performance reflecting higher selectivity
1.2. Property Development Operational performance reflecting higher selectivity Decrease in individual orders but Contribution from bulk orders to Total orders outperformance vs market stable volume but pressure on prices 5% Stable volume and -1% pressure on prices -5% -6% -8% vs -21%(1) -10% (marke
Slide 19: Lafayette (Lyon) – Transforming office tower into residential
1.2. Property Development ReShapE – Adapt office portfolio to new demands Lafayette (Lyon) – Transforming office tower into a residential project Sale of the asset from investment division to development division completed in July 2024 8,846 sq.m converted into 101 high-quality housing units 47-unit
Slide 20: Recognized know-how in mixed-use projects
1.2. Property Development ReShapE – Develop and invest in 2050 city Recognized know-how in mixed-use projects 1 PIOM(1) campus project delivered in June 2024 2 La Plateforme digital campus, a mixed-use project Showcase of Icade’s know-know Campus dedicated to soft Digital and emerging Launch of work
Slide 21: H1 2024 Financial Results
2. H1 2024 FINANCIAL RESULTS DESTINATION GAVY (Saint-Nazaire, Loire-Atlantique) 2024 Half-Year Results I July 22, 2024 21
Slide 22: Stable strategic NCCF, resulting from contrasting division performances
2. H1 2024 Financial Results Stable strategic NCCF, resulting from contrasting division performances (In €m) 206.3 (€2.72/share) Stable NCCF from strategic operations 169.0 57.8 (€2.23/share) 35.0 111.2 111.1 (€1.47/share) (€1.47/share) (95.1) (34.5) (0.6) Total NCCF H1 2023 NCCF from NCCF from stra
Slide 23: NAV impacted by change in asset values
2. H1 2024 Financial Results NAV impacted by change in asset values €5,098m €4,745m NTA -6.8% (per share) 67.2 2.2 65.0 62.6 (in € per share) (3.3) (1.2) (2.4) EPRA NTA Group Change Other EPRA NTA 2023 EPRA NTA 12/31/2023 NCCF in FV of Property factors 06/30/2024 interim 06/30/2024 Investment assets
Slide 24: Property Investment
2.1 PROPERTY INVESTMENT HELSINKI-IÉNA (Paris Orly-Rungis Business Park , Val-de-Marne) 2024 Half-Year Results I July 22, 2024 24
Slide 25: Growth supported by indexation, well-positioned offices & light industrial
2.1. Property Investment Growth supported by indexation, well-positioned offices & light industrial (In €m) +€6.8m 181.1 8.7 1.8 0.6 187.8 (4.0) +7.8% (0.3) +6.4% LFL change LFL change Gross rental Well-positioned To be repositioned Light Other Other Gross rental income H1 2023 offices offices indus
Slide 26: Solid Property Investment NCCF in H1 2024
2.1. Property Investment Solid Property Investment NCCF in H1 2024 (In €m) +€35.0m (+35.2%) 24.0 3.1 134.6 99.6 7.9 NCCF from Property Net rental Financial result Other NCCF from Property Investment H1 2023 income Investment H1 2024 Improvement in net rental income driven by revenue growth and lower
Slide 27: Slight decrease in fair value of Property Investment portfolio
2.1. Property Investment Slight decrease in fair value of Property Investment portfolio (In €m, 100% + Group share of JVs basis / excluding duties) -3.4% on a reported basis 6,847 77.7 6,614 (53.4) (256.8) • Property Investment portfolio down -3.8% over 6 months on a LfL basis -3.8% • EPRA Net Initi
Slide 28: Deceleration in valuation trends in H1 2024
2.1. Property Investment Deceleration in valuation trends in H1 2024 Change in half-year value On a like-for-like basis Well-positioned offices To-be-repositioned offices Light industrial Total H2 22 H1 23 H2 23 H1 24 H2 22 H1 23 H2 23 H1 24 H2 22 H1 23 H2 23 H1 24 H2 22 H1 23 H2 23 H1 24 1,3% 0,7%
Slide 29: Property Development
2.2 PROPERTY DEVELOPMENT BELLECOMBE (Lyon, Rhône) 2024 Half-Year Results I July 22, 2024 29
Slide 30: In-depth portfolio review in a challenging environment
2.2. Property Development In-depth portfolio review in a challenging environment Total impact of €(63.0)m on net profit 1 Maintained Update price lists to reflect most recent market Including current impact (NCCF) projects conditions (especially on bulk sales) €(34.0)m 2 Write down incurred study co
Slide 31: Decrease in NCCF driven by one-off impairment losses
2.2. Property Development Decrease in NCCF driven by one-off impairment losses In €m 13.6 5.7 13.1 (1.4) (4.8) (34.0) (20.9) NCCF Property Margin impact Operating costs Other effects NCCF Property Depreciations NCCF Property Development from Taitbout(1) impact Development Development H1 2023 H1 2024
Slide 32: Debt Management
DEBT 3. MANAGEMENT HYFIVE (La Défense, Hauts-de-Seine) 2024 Half-Year Results I July 22, 2024 32
Slide 33: Optimised cash and debt management
3. Debt management Optimised cash and debt management Strong improvement of current financial result Tight cost of debt management (In €m) 1.52% 100% 49.4 42.2 Average cost of debt (0.6) (vs 1.60% as of 12/31/2023) Hedged in 2024 8.9 19.3 8.1 Optimised cash management (42.9) €1.2bn c.4% Current Cost
Slide 34: Strong liquidity and improved debt maturity schedule
3. Debt management Strong liquidity and improved debt maturity schedule Liquidity position Debt maturity schedule As of June 30, 2024 (as of June 30, 2024, in €bn)(2) Covering principal until 2028 €1.0bn Net cash position €1.4bn 0.21 Unused committed revolving 0.66 credit facilities(1) 0.60 0.60 0.5
Slide 35: Debt ratios reflecting depreciations and no disposals in H1 2024
3. Debt management Debt ratios reflecting depreciations and no disposals in H1 2024 Loan-To-Value Net debt-to-EBITDA(1) In €bn 3,5 3,0 3,1 15,0x 35.9% 3,0 13,0x 33.5% 2,5 11.4x 11,0x 2,0 1,5 7.0x 9,0x 1,0 7,0x 0,4 -36.7%5,0x 0,5 0,3 20,0% 0,0 3,0x 12/31/2023 06/30/2024 12/31/2023 06/30/2024 LTV incl
Slide 36: Healthcare – No change in disposal strategy
3. Debt management ReShapE – Finance the plan Healthcare – No change in disposal strategy Indicative Cash-in to be Process Conditions Current status timeline received • Sale of Icade’s 22.52% • Commitment from Praemia • Ongoing discussions remaining stake in Praemia REIM to allocate funds with third
Slide 37: FY 2024 Outlook
FY 2024 OUTLOOK 4. VALLÉE PETRA (Créteil, Val-de-Marne) 2024 Half-Year Results I July 22, 2024 37
Slide 38: 2024 guidance reaffirmed
4. FY 2024 Outlook 2024 guidance reaffirmed 1 2 3 Property Investment Property Development NCCF from discontinued activities Solid performance in H1 2024 / High depreciation in H1 2024 / per share secured at 95% Lower growth in H2 2024 Stabilisation of business in H2 2024 2024 Group NCCF per share G
Slide 39: Appendices
APPENDICES 29-33 CHAMPS-ELYSÉES (Paris, Ile-de-France) 2024 Half-Year Results I July 22, 2024 39
Slide 40: New pace on leasing market, vacancy and supply on the rise
Appendices New pace on leasing market, vacancy and supply on the rise 1 Take-up, immediate supply and vacancy rate Stable take-up expected for 2024 in the Paris region • H1 take-up volume (853,300 sq.m, -5% yoy) supported by large deals (280,000 sq.m, +1% (million sq.m / vacancy in %) yoy). Smaller
Slide 41: A highly polarized market
Appendices A highly polarized market Q2-2024 Paris CBD La Défense Western Crescent Inner Ring Outer Ring Physical vacancy 2.6% ▲ 14.6% ▼ 15.1% ▲ 18.4% ▲ 5.3% ▲ rate +50 bps -40 bps +90 bps +400 bps +10 bps (vs a year earlier) Take-up 158,500 sq.m 68,900 sq.m 147,900 sq.m 140,800 sq.m 66,800 sq.m (H1
Slide 42: Investors still cautious and selective, despite the ECB's first rate cut
Appendices Investors still cautious and selective, despite the ECB’s first rate cut Investment keeps slowing down Central offices, logistics and hotels lead the market • €15bn invested in 2023 (-50% yoy) vs €29bn in 2022 • Offices accounted for 31% of all investments in H1 2024 (-55% yoy) • €5.9bn i
Slide 43: Prime yields are stabilizing on core markets
Appendices Prime yields are stabilizing on core markets The pressure on offices’ prime yield is decreasing Foreign investors are back • Domestic players are up to 52% (Q2 2024) vs 78% last year and pan • Yields for Paris CBD offices are now stabilized around 4.25%. However, there is European up to 1
Slide 44: Expected levels of indexation still high
Appendices Expected levels of indexation still high Commercial portfolio index split – June 2024 (in % of headline rent) c. 100% ICC 13% Other indices 8% leases linked to indices with a strong inflation component ILAT 79% Evolution of indices(1) (in %) 6.9% +4.7% >+5.5% 5.9% 5.5% 3.5% 3.0% 2.8% Inde
Slide 45: A diversified portfolio, with assets located in good hubs
Appendices A diversified portfolio, with assets located in good hubs La Défense 244 €6.6bn 1.8M 1st ring Portes de Paris Business Park(2) assets GAV sq.m 06/30/2024 OFFICE Breakdown by asset type GAV % GAV OFFICE TV STUDIO DATA CENTER Offices €5.5bn 83% Nanterre Light industrial €0.7bn 11% Regional
Slide 46: A selective positioning in the main regional cities
Appendices A selective positioning in the main regional cities Focus Regions – all assets 11% ORIANZ Bordeaux, Gironde NEXT Lyon, Rhône LAFAYETTE Lyon, Rhône MILKY WAY Lyon, Rhône 241,475 sq.m €0.8bn (1) of the overall portfolio Offices • Prime locations LA FABRIQUE Lyon SADI CARNOT Marseille, Bouch
Slide 47: Lease expiry schedule as of end of June 2024
Appendices Lease expiry schedule as of end of June 2024 Annualised IFRS rental income for Property Investment Division (In €m) 87 58 54 41 37 36 28 12 6 5 7 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >= 2034 2024 Half-Year Results I July 22, 2024 47
Slide 48: Development pipeline as of June 30, 2024
Appendices Development pipeline as of June 30, 2024 Type Estimated date Floor area Rental income Cost(2) Remaining capex Project name Location of works Property type of completion (sq.m) (€m) YoC(1) (€m) (€m) Pre-let COLOGNE Rungis Refurbishment Office Q3 2024 2,927 11 0 100% NEXT Lyon CBD Refurbish
Slide 49: Property Investment portfolio
Appendices Property Investment portfolio 06/30/2024 12/31/2023 Yield is up by 30bps over 6 months, reflecting a slight decrease in value (-3.8% LfL) Portfolio value (100% + Group share of JVs basis, excl. duties) €6.6bn €6.8bn Financial occupancy rate above 90% for well-positioned offices and light
Slide 50: A continuous decline in market momentum
Appendices A continuous decline in market momentum Housing starts and building permits in France Housing stock, net orders and average time on market In housing units per year In housing units per year Source: ECLN Source: FPI Change 12 months rolling 600 000 180 000 25 +51% Change 160 000 22 months
Slide 51: After sharp rises, construction costs and selling prices stabilise
Appendices After sharp rises, construction costs and selling prices stabilise Construction cost and price indices in Q4 2023 Sale prices and stock of new housing units available for sale Index rebased to 100 in 2015 Price incl. taxes in €/sq.m excl. notarial fees and other costs Stock of new housing
Slide 52: Property Development orders: a shift towards institutional investors
Appendices Property Development orders: a shift towards institutional investors Breakdown of orders by type of customers -0.4 pps +14.5 pps 20.7% 29.8% 29.4% 35.2% 53% of institutional 06/30/2023 06/30/2024 investors (vs. 46% in H1 2023) 25.2% -6.3 pps 18.0% 24.3% 17.4% -7.8 pps Social housing insti
Slide 53: Arcade (Plessis-Robinson) – Transform office buildings into residential
Appendices Arcade (Plessis-Robinson) – Transform office buildings into a large-scale residential project Office to residential transformation by the development division starting in 2024 Sale of the asset from investment division to development division completed in Q2 2024 Joint development with SE
Slide 54: EPRA NRV, NTA & NDV
Appendices EPRA NRV, NTA & NDV (In € per share) 68.3 0.8 0.4 67.2 4.2 Chg. vs. 62.6 In € per In €m share Dec. 2023(1) (6.2) (0.4) EPRA NDV 5,181 68.3 (6.8%) EPRA NTA 4,745 62.6 (6.8%) EPRA NRV 5,092 67.2 (6.4%) EPRA Transfer tax Impact Other EPRA Impact Other EPRA NDV optimisation of liabilities fac
Slide 55: Consolidated P&L indicators
Appendices Consolidated P&L indicators in €m 06/30/2024 06/30/2023 Change • Stable revenue in markets under pressure Total IFRS revenue 698.9 696.6 Stable • EBITDA impacted by significant property development depreciation (€85m) after an EBITDA 67.1 154.8 (56.7%) exhaustive review of operations in H
Slide 56: P&L indicators of Property Investment division
Appendices P&L indicators of Property Investment division On a 100% basis / in €m 06/30/2024 06/30/2023 Change LfL change Gross rental income 187.8 181.1 +3.7% +4.1% Net to gross rental income ratio 89.9% 88.9% +1.0 pps Financial result (11.4) (35.5) +67.8% In Group share / in €m NCCF Group share 13
Slide 57: P&L indicators of Property Development division
Appendices P&L indicators of Property Development division On a 100% + Group share of JVs basis / in €m 06/30/2024 06/30/2023 Change Economic revenue 582.9 583.4 (0.1%) Property margin rate 7.2% 16.8% (9.6)pts Current economic operating profit/(loss) (18.2) 31.9 NA Current economic operating margin