Peach Property Group Ag · SIX:PEAN
Peach Property — Investor Presentation (October 2020)
34 slides from Peach Property's investor presentation, Oct 13, 2020
Slide 1: Company Presentation October 2020
Option 1 Company Presentation October 2020
Slide 2: Disclaimer
Disclaimer These materials contain forward-looking statements based on the currently held beliefs and assumptions of the management of Peach Property Group AG, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainti
Slide 3: Agenda
Agenda 1. Introduction to Peach Property 2. Credit highlights 3. Financials 4. Appendix 3
Slide 4: German residential player in B-cities with market value of ~EUR 2bn and unique tenant management
German residential player in B-cities with market value of ~EUR 2bn and unique tenant management About Peach Property Group Key financial data • Peach is a Swiss-listed company investing in real estate with a CHFmm FY’18 FY’19 H1’20 H1’20 PF focus on residential property in Germany (98% of Twinpeaks
Slide 5: Peach properties
Peach properties Affordable German residential properties in carefully selected B-cities 5
Slide 6: Strong track record and history as a German residential player
Strong track record and history as a German residential player Evolution of Peach Accelerated growth phase Gradual shift towards investment Developer focus GRANDE acquisition (CHF 324mm)2 PURE and ROCK (CHF 839mm)3 portfolios in German residential real estate • 1999: Foundation through • 2011: Acqui
Slide 7: Acquisitions complement existing focal areas and strengthen market position in core regions
Acquisitions complement existing focal areas and strengthen market position in core regions Well-located portfolio with relevant scale Optimum supplement for existing locations Existing Portfolio PURE and ROCK Peach Point New Peach Point Split by location (incl. PURE and ROCK) Thuringia 2% Kiel Stra
Slide 8: Acquisitions lead to significant increase in scale and diversification
Acquisitions lead to significant increase in scale and diversification Portfolio acquisition Portfolio acquisition Portfolio as of H1 2020 “PURE” “ROCK” Total Peach Portfolio 23,220 apartments4 Apartments 12,906 apartments 5,449 apartments 4,838 apartments (+80%) Lettable area 848,224 sqm 346,1731 s
Slide 9: Agenda
Agenda 1. Introduction to Peach Property 2. Credit highlights 3. Financials 4. Appendix 9
Slide 10: Peach has a compelling credit story
Peach has a compelling credit story Focus on highly resilient German residential property market, 1 with our focus markets exhibiting solid growth and low rent volatility Attractive and diversified portfolio with market value of CHF 2.0 2 billion following the PURE and ROCK acquisitions 3 Stringent
Slide 11: Germany has the largest housing market in Europe and is structurally undersupplied
Germany has the largest housing market in 1 Europe and is structurally undersupplied Real estate specific Largest housing market in Europe… …with a strong rental culture… Distribution of population between owner occupiers and tenant3 Total population per country1 Total households 1 83.2 Owner Tenant
Slide 12: Germany's affordable housing segment is extremely stable
Germany’s affordable housing segment is 1 extremely stable… Real estate specific Low, stable vacancy rate through the cycle… … with exceptionally high average tenancy length3 German residential vacancy rate¹ German office vacancy rate² Peach average tenancy 12.0% length ~10 years 10.0% 8.0 yrs 8.0%
Slide 13: B-cities offer an attractive risk/return profile
… especially in B-cities that offer an attractive 1 risk/return profile B-cities Multiplier in B and C-cities significantly lower… … offering an attractive initial return profile Average multiplier multi-family buildings1 Net initial yield 2019 in German Secondary Locations 2 A cities B cities C cit
Slide 14: More than 60% of portfolio in NRW – Germany's economic engine
More than 60% of portfolio in NRW – Germany’s 1 economic engine NRW Key economic regions in Germany… …and home to a high number of large German corporates • Key metropolitan area in Germany, and one of the largest in Europe (17.9m inhabitants1) • Germany’s economic hub, generating approx. 21% of Ger
Slide 15: Significant potential to increase rents in existing portfolio
Significant potential to increase rents in existing 2 portfolio… Subsidized apartments New tenancies vs. average in-place rent/sqm/month within Peach Portfolio as per W&P appraisal valuation H1 2020 in largest portfolios1 (PF for ROCK) Average in-place rent New tenancies let H1 2020 Market rent New
Slide 16: Strong organic like-for-like growth in rental income
… translating to strong organic “like-for-like” 2 growth in rental income… Like-for-like rental increase (compared to previous 12 month period) Peers: Key success factors 3.9% 2.3% Peers: 2.8% 1• Unique tenant management 3.9% 5.4% approach leading to minimal 1.9% 3.4% attrition 3.4% 2.9% 4.5% 1.9% 2
Slide 17: Rent upside from market placement of strategic vacancies
... allowing for significant rent upside from the 2 market placement of Peach’s strategic vacancies Breakdown of vacant apartments as of December 31, 2019 Vacancy (based on number of units) Target: reducing vacancy by approx. 20–40 Factual vacancy (c. 2.3%) apts per month 9.3% 1,158 (115) (193) (94)
Slide 18: Structured acquisition process within a defined acquisition strategy
Structured acquisition process that results in strategically 3 sound acquisitions within a defined acquisition strategy that leverages on local expertise Population density Germany (2019)¹ Inhabitants per sqkm (2019) Below 104 105–156 Evaluation of around 157–283 4.5 million sqm 284–933 (2019) Above
Slide 19: Fully digital end-to-end process
4 Fully digital «end-to-end»-process Property Management, Capex Marketing / Leasing Tenant Management & Accounting/Reporting SAP POLYESTATE ZENDESK S/4HANA HIGHLIGHTS • Central marketing CRM • Fully digital document management • Central ticketing management (incoming invoices, approvals, etc.) • Wha
Slide 20: Peach Points: Client service excellence through regional service hubs
Peach Points: Client service excellence delivered 4 through regional service hubs Regional service hubs Digital capabilities Proven and time-tested service model that forms the basis for Peach’s strong perception by tenants, ultimately resulting in vacancy reduction and rent optimisation Source: Com
Slide 21: Fully digitalized, scalable tenant service model
360 degree tenant service model: strong digital 4 capabilities embedded in multi-region service hubs Tenants with full multi-channel access: • Online (24/7): App, Web Portal, Mail, WhatsApp and Facebook Bot Tenants • Offline: Telephone, Peach Points Property Management in Peach Points • All notifica
Slide 22: Strong track record of delivery and performance improvements
Strong track record of delivery and performance 5 improvements Acquisition of GRANDE portfolio for EUR223mm and a market value of EUR292mm Financial values in CHF mm Portfolio Portfolio Portfolio Portfolio Portfolio KPIs Change Portfolio KPIs Portfolio KPIs KPIs KPIs KPIs KPIs H1 2020 PF since FY H1
Slide 23: Internalized strong platform
6 Internalized strong platform... Access to off-market deals given extensive network Institutional investors, incentivized sellers, private owners Capital markets Institutional investors debt / equity, private investors Asset Economic Sourcing Modernization Letting management performance Rig
Slide 24: Experienced team of operators with strong track record
... managed by an experienced team of operators 6 with strong track record Dr. Thomas Wolfensberger Dr. Marcel Kucher Chief Executive Officer Chief Financial Officer / Chief Operating Officer • Responsible for corporate strategy, capital markets, portfolio management • Responsible for finance, opera
Slide 25: Agenda
Agenda 1. Introduction to Peach Property 2. Credit highlights 3. Financials 4. Appendix 25
Slide 26: Letting activity uninterrupted by COVID-19
Peach portfolio letting activity was uninterrupted by COVID-19 Monthly letting activity through August 31, 2020 Peach saw a small Positive net lettings performance Continued strong performance post H1 cut-off, negative net letting in all months from February through with data (as of August 31st) ind
Slide 27: Continued track record of revenue and profitability expansion
Continued track record of revenue and profitability expansion Total revenue (CHF mm)1 Adj. EBITDA (CHF mm)3 % growth vs. last period % margin4 24% 52% 68% 3% 11% 78% 62% 45% 57% 57% 47% 56% 53.4 LTM PF 173.8 PURE&ROCK 153.5 158.2 91.3 21.7 60.2 18.3 17.0 15.6 44.5 49.2 12.7 10.9 2017 2018 2019 H1 20
Slide 28: Enhanced profitability, financing structure and acquisitions improve FFO profile
Combination of enhanced profitability, optimized financing structure as well as inorganic growth through acquisitions lead to improved FFO profile Stable rental income profile… … as well as NAV growth… Rental income (CHF mm) % LfL rental growth IFRS NAV (CHF mm) 800 Includes Sep ’20 mandatory conver
Slide 29: Illustrative Funds from Operations
Illustrative Funds from Operations Illustrative Funds from Operations Capex investments Regular maintenance work is (CHF mm) • Target rental operating margin of 80% (77% as per H1 2020) expensed through P&L • Supported by CHF 110mm target rental income p.a. 5.4% Lfl rental income growth in H1 20
Slide 30: Unchanged financial policy
Unchanged financial policy • Mid-term target 55% net market value LTV • Mid-term guidance FFO I yield of more than 4% on IFRS NAV • Target average debt maturity profile > 4 years FINANCIAL POLICY CONSIDERATIONS • Maintain ample liquidity with minimum CHF 20-30mm cash on balance sheet • Continue to m
Slide 31: Agenda
Agenda 1. Introduction to Peach Property 2. Credit highlights 3. Financials 4. Appendix 31
Slide 32: Historical Income Statement
Historical Income Statement In TCHF 2017 2018 2019 H1 20191 H1 20201 LTM2 Comments Rental income 1 16,264 29,644 38,915 19,285 27,373 47,003 Valuation gains from investment properties 42,620 59,425 113,565 24,866 21,376 110,075 1 Rental income up 31.3% in 2019 on Profit on disposal of investment pro
Slide 33: Historical Balance Sheet
Historical Balance Sheet In TCHF 2017 2018 2019 H1 20191 H1 20201 Comments Cash and cash equivalents 49,157 53,484 46,248 32,893 39,303 Total receivables2 8,004 6,537 21,052 10,606 26,868 Contract assets 1 43,489 0 0 0 0 1 Contractual assets of CHF43.5mm Development properties 50,528 37,263 33,757 3
Slide 34: Historical Cash Flow Statement
Historical Cash Flow Statement 2017 2018 2019 H1 20191 H1 20201 Comments In TCHF Result before tax 51,548 56,874 109,675 25,351 17,050 Depreciation & amortization 160 197 566 244 439 1 Improved working capital Valuation result of investment properties/valuation losses on development (40,880) (55,046
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