Patrizia Se · XETR:PAT
Patrizia — Investor Presentation (January 2021)
50 slides from Patrizia's investor presentation, Jan 5, 2021
Slide 1: Leading in Pan-European Real Estate
FOR CLIENTS AND SHAREHOLDERS LEADING IN PAN-EUROPEAN REAL ESTATE Company Presentation | November 2019 Company Presentation 9M 2020 | January 2021 PATRIZIA | © 2020
Slide 2: Agenda
Agenda • Equity Story • Financials 9M 2020 • Appendix PATRIZIA | © 2020 2
Slide 3: A leading partner for global real assets
Equity Story A leading partner for global real assets Strong track record built over the past 36 years 36 >46bn Top 10 years of real estate assets under investment manager experience management (EUR) in Europe1 Strong local presence: Strong performance: Strong potential: 24 ~11% 627m offices globall
Slide 4: PATRIZIA's growth driven by client demand
Equity Story PATRIZIA‘s growth driven by client demand AUM growth directly translates into growing and strongly recurring management fees 70 450 60 +25.0% p.a. 348.0 308.0 – 335.0 320.2 Total service fee 50 income1 300 198.0 40 211.9 – 188.6 190.9 192.0 +27.1% p.a. 30 165.2 175.3 Management fees1 14
Slide 5: Predictable management fees and diversified client base
Equity Story Predictable management fees and diversified client base 74% of our AUM have a maturitiy of more than 10 years Maturity breakdown of AUM1 Equity commitments by clients2 78% 5% 7% 63% 14% 49% 30% 74% 21% 7% >10 years/unlimited 5–10 years Top 1 Top 5 Top 10 Top 25 Top 50 Top 100 2–5 years
Slide 6: Attractive products across all asset and risk classes
Equity Story Attractive products across all asset and risk classes Our pan-European investment strategies are designed to best serve our clients’ needs EUR sqm 46.2 Assets under bn 17.1 Real estate assets m 77 % Resilient Core and management under management Core plus strategies 14% 7% 3% 22% 4% 12%
Slide 7: A critical success factor: Local & sector expertise
Equity Story A critical success factor: Local & sector expertise Creating alpha in today’s market requires insights, patience, local knowledge & active management capabilities Outstanding screening and execution skills Pan-European transactions, asset and development teams Stockholm > 6,400 deals sc
Slide 8: Long-term structural growth market
Equity Story Long-term structural growth market We are benefiting from the structural growth market for real estate investment management, despite short-term uncertainties Demographic change Our clients’ capital is Aging population threatens conventional pension growing and hungry for systems yield
Slide 9: Investors' expectations are growing
Equity Story Investors’ expectations are growing Investors want more asset classes, bigger tickets and more global reach with preferred partners 2019: USD 151.0bn Record high in capital raised for Real Estate USD 43.5bn Combined volume three largest RE funds 39.0% Drop in funds closed (only 295) USD
Slide 10: Proven track record of accretive acquisitions
Equity Story Proven track record of accretive acquisitions Rockspring and TRIUVA are now part of the ONE PATRIZIA world Net purchase price reconciliation| EUR m Run-rate EBIT reconciliation| EUR m 35.4 22.0 349.3 40.0 313.9 18.0 Purchase Extraordinary Net purchase Recurring M&A Run-rate price perfor
Slide 11: Top investment managers accelerate growth
Equity Story Top investment managers accelerate growth AUM of leading real estate investment managers have more than doubled since 2012 To be a top 10 RE investment manager in 2023 you likely need: AUM EUR >60.0bn in Europe EUR >140.0bn EUR >140.0bn globally! // AUM EUR 71.0bn AUM EUR >60.0bn AUM AU
Slide 12: Relative attractiveness of real estate remains high
Equity Story Relative attractiveness of real estate remains high … but record low bond yields mean, that there may be a ceiling to the yield gap now Bond-Yield-Gap 600 BP Office Spread BP Retail Spread BP Logistics Spread BP 500 BP 400 BP 300 BP 200 BP 100 BP 0 BP -100 BP 2014 Q4 2000 Q4 2002 Q4 200
Slide 13: Investment pressure continues
Equity Story Investment pressure continues Global under-allocation to real estate continues to drive growth By type of investor Allocations Average allocation to real estate | as % of overall portfolio Increase 63.6% Maintain 28.1% Current allocation Target allocation Decrease 8.3% 12.40% 11.50% 11.
Slide 14: Yield development
Equity Story Yield development Office and logistic yields were moving sideways in the past quarters, retail shows an increasing trend Office Retail Logistics Yield range Yield range Yield range European Prime Yield European Prime Yield European Prime Yield Long-term mean Long-term mean Long-term mea
Slide 15: Global clients with a strong European base
Equity Story Global clients with a strong European base Partnerships with a diverse mix of global institutional investors foster our understanding of clients’ needs Pension funds 9% 1% Insurance 7% companies 11% > 400 44% Savings banks Banks, endowments institutional investors & corporates Private i
Slide 16: Leading capital raising activity in the market
Equity Story Leading capital raising activity in the market PATRIZIA has invested significantly in its capital raising capabilities over the past years and is now reaping the rewards Institutional equity raised | EUR m 73% 3,500 3,000 of equity raised New from existing clients 2,500 clients 2,000 EU
Slide 17: Investment Ecosystem
Equity Story Investment Ecosystem Strategic global innovation and technology activities Our mission is to increase operational excellence, tech Selected Investments leadership and develop new business opportunities in a BrickVest (February 2020) client centric approach by: • PATRIZIA acquires the pl
Slide 18: Selected indirect investments
Equity Story Selected indirect investments Expanding PATRIZIA’s global innovation ecosystem through investments in Venture Capital Funds Pi Labs Taronga Ventures Camber Creek Description UK Based PropTech Venture Australia Based PropTech US Based PropTech Venture Capital Fund Venture Capital Fund Ca
Slide 19: Social centrepiece: PATRIZIA Foundation
Equity Story Social centrepiece: PATRIZIA Foundation Creating an environment for education for more than 20 years What we are doing Example: Primary School extension Buyamba, Uganda • Initiating child cares, hospitals and schools to give children a safe Expand existing PATRIZIA Primary School in Buy
Slide 20: Stronger for clients and shareholders
Equity Story Stronger for clients and shareholders PATRIZIA share performance | as at 05.01.2021 PATRIZIA on the capital market Closing price YTD L6M L12M • PATRIZIA is listed in the Prime Standard segment of 30.00 30.00 € Deutsche Börse AG and member of the SDAX, DIMAX, EUR 26.15 +0.0% +21.3% +32.1
Slide 21: Growing dividends in line with our business development
Equity Story Growing dividends in line with our business development Increase in dividend per share by 7.4% y-o-y for FY 2019 Dividend per share (EUR) Dividend policy FY 2019 onwards 0.29 X% Y% +7.4% Basis for 0.27 dividend proposal FY 2018 FY 2019 Growth in management Growth in AUM fees (y-o-y) (y-
Slide 22: Strategy 2023 | A clear strategy
Equity Story Strategy 2023 | A clear strategy… Our aspiration for the next 3 – 5 years Expand investment opportunities Broad diversification through more geographies, more real assets & real estate debt Strengthen footprint Leading market insights through more international offices & more sector exp
Slide 23: Makes PATRIZIA stronger for clients & shareholders
Equity Story …makes PATRIZIA stronger for clients & shareholders Our aspiration for the next 3 – 5 years ✓ 1 Real assets investment manager ✓ 2 More diversified product offering ✓ 3 Larger international client base ✓ 4 Early mover in automation & technology ✓ 5 Stable income & higher company value P
Slide 24: Strategic Agenda | Expansion across quadrants
Equity Story Strategic Agenda | Expansion across 4 quadrants Leverage existing platform offering governance, research, capital raising and market services – bolt on boutiques Core Core + Value-add Opportunistic Equity Real Estate Debt Private Public Equity Infrastructure Debt Expansion into additi
Slide 25: Over 3-5 years AUM could increase by ~15% p.a. incl. M&A
Equity Story Over 3-5 years AUM could increase by ~15% p.a. incl. M&A… AUM of EUR 60bn organically and EUR 80bn incl. M&A are achievable EUR ~80.0bn Illustrative example EUR ~60.0bn EUR 44.5 bn 3-5 2019 years Strategic target PATRIZIA | © 2020 25
Slide 26: And directly translate into growth of fee income
Equity Story … and directly translate into growth of fee income Management fees could increase by 8 – 10% p.a. organically Illustrative example Performance fees EUR 91.8m (hist. Ø: EUR 60.0m p.a.) Transaction fees (hist. Ø: EUR 55.0m p.a.) EUR 65.3m EUR ~250.0m EUR 190.9m Management fees 3-5 years 2
Slide 27: Strategy for our clients spurs further growth
Equity Story Strategy for our clients spurs further growth Organic and inorganic growth lead to stronger platform Status Quo Measure Mid-term target Assets under Management EUR 44.5bn Grow 8 – 10% p.a. organically EUR 60.0bn EUR 60.0bn Structural growth market Mergers & Acquisitions EUR 44.5bn Grow
Slide 28: Agenda
Agenda • Equity Story • Financials 9M 2020 • Appendix PATRIZIA | © 2020 28
Slide 29: Highlights
Financials 9M 2020 Highlights Solid financial results despite challenging market environment – FY 2020 guidance specified Assets under management1 | EUR bn 9M 2020 • Operating income of EUR 100.2m in 9M 2020, already reaching the +4.0% 46.2 46.5 – 48.0 lower end of the broadened FY 2020 guidance r
Slide 30: Operating income
Financials 9M 2020 Operating income Continued growth in management, transaction and performance fees Highlights Composition 9M 2020 | EUR m • Total service fee income increased by 6.2% y-o-y to EUR 248.1m (9M 2019: EUR 233.7m) driven by: +4.4% -24.4% • Increased Management fees of EUR 145.0m +
Slide 31: Total service fee income
Financials 9M 2020 Total service fee income PATRIZIA continues to grow while still delivering superior investment performance for clients Highlights Total service fee income | EUR m • Total service fee income increased by 6.2% y-o-y to EUR 248.1m (9M 2019: EUR 233.7m) 100%2 348.0 • Increased Managem
Slide 32: Transaction fees
Financials 9M 2020 Transaction fees PATRIZIA is still active for its global client base despite challenging Covid-19 market environment Highlights Transaction volume (closed/signed) | EUR bn closed 9.0 signed • Ongoing transaction activity for PATRIZIA’s global client base drove transaction fee grow
Slide 33: Performance fees
Financials 9M 2020 Performance fees Superior returns for clients translate into attractive performance fees • Performance fees of EUR 74.1m in 9M 2020 as a stable contributor to overall financial results • Performance fee guidance for FY 2020 specified to EUR 80.0 - 90.0m (from EUR 80.0 – 110.0m) as
Slide 34: Performance fees
Financials 9M 2020 Performance fees Visibility until 2025 due to Dawonia performance fee claims Performance fee pool1 – Illustrative example | EUR m • Due to performance fee claim on Dawonia3 of EUR 362.3m pre-tax (EUR 295.3m after 72.5 72.5 72.5 72.5 72.5 tax; see also page 44), good visibility on
Slide 35: Profitability and costs
Appendix Profitability and costs Continued efficiency improvements propel profitability and cost ratios AUM vs total cost ratio | EUR bn vs % EBITDAR margin (+/- principal investments) | EUR m, LHS vs %1 50 46.5 – 48.0 1% 180 50% 45 41% 34 1.21% 46.2 45% 1% 160 43% – 44.5 39% 39% 40 41% 41.0 140 35%
Slide 36: Guidance for FY 2020
Financials 9M 2020 Guidance for FY 2020 Guidance for FY 2020 specified on the basis of increased visibility for Q4 2020 Assumptions for FY 2020 Income composition FY 2020e | EUR m • Specified operating income guidance for FY 2020e of EUR 110.0 to 130.0m reflects the already reached lower end of form
Slide 37: Solid financial position
Financials 9M 2020 Solid financial position Rock-solid balance sheet and strong cash position make PATRIZIA well prepared for the crisis • Strong balance sheet ratios and capital structure to facilitate further profitable growth Strong balance sheet Significant liquidity EUR m 30.09.2020 EUR m 30.09
Slide 38: Agenda
Agenda • Equity Story • Financials H1 2020 • Appendix PATRIZIA | © 2020 38
Slide 39: Our competitive edge
Appendix Our competitive edge Excellent market access and local knowledge are key to our strong investment performance for clients • Transactions worth EUR ~42bn completed since 2013 ‘Turn to’ real estate investment Transactions • Transaction market expected to remain active resulting in a manager e
Slide 40: Global Perspective with Local Expertise & Presence
Appendix Global Perspective with Local Expertise & Presence PATRIZIA offers investment solutions with global reach & opportunity 24 PATRIZIA offices globally to service clients & manage real assets locally 40+ boutique operating partners worldwide managed by PATRIZIA ⚫ PATRIZIA offices globally ◼ Ma
Slide 41: Product overview
Appendix Product overview Direct & indirect investment opportunities allow our clients to achieve their individual portfolio objectives Commingled Funds Club Deals/JVs Separate Accounts Global Partner Products Management Mandates • Open-/closed-ended • Targeted business • Individual, nimble • Indire
Slide 42: Products
Appendix PRODUCTS PATRIZIA’s closed-end funds with an anniversary and strong fund performance • The team PATRIZIA GrundInvest celebrates its 5th anniversary. Facts • The investment volume is over 1 billion Euro.1 • More than 7,000 participations were made by investors.1 • Average payout of 4.3 % p.a
Slide 43: Top EU investment managers
Appendix Top 10 EU investment managers Investors’ preference for diversification drives European consolidation EUR 23.7bn Increase by +96% EUR 46.5bn Average AUM Average AUM of the Top 10 in 2012 of the Top 10 in 2018 Pos. Investment Manager AUM (EUR) Pos. Investment Manager AUM (EUR) 1 AXA Real Est
Slide 44: Capital allocation
Appendix Capital allocation Assets under Invested capital Invested capital Participations As at 30.09.2020 management (fair value) (at cost) EUR m EUR m EUR m in % Third-party business 39,876.4 0.0 Co-Investments 6,315.8 496.5 91.4 Residential 5,435.6 479.8 77.3 Dawonia GmbH 4,828.0 158.9 1 51.7 5.1
Slide 45: Reconciliation of operating income
Appendix Reconciliation of operating income EUR k 9M 2020 9M 2019 Change EBITDA 101,837 95,104 7.1% Amortisation of other intangible assets¹, software and rights of use, depreciation of property, plant and equipment as well as financial investments -29,157 -31,473 -7.4% EBIT 72,680 63,631 14.2% Fina
Slide 46: Consolidated income statement
Appendix Consolidated income statement EUR k 9M 2020 9M 2019 Change Revenues 223,157 242,920 -8% Income from the sale of investment property 0 273 -100% Changes in inventories -650 -23,130 -97% Other operating income 11,501 9,514 21% Income from the deconsolidation of subsidiaries 116 585 -80% Total
Slide 47: Consolidated balance sheet | Assets
Appendix Consolidated balance sheet | Assets EUR k 30.09.2020 31.12.2019 A. Non-current assets Goodwill 211,323 210,292 Other intangible assets 115,671 131,895 Software 16,084 10,326 Rights of use 25,801 24,988 Investment property 1,835 1,835 Equipment 6,301 6,056 Associated companies accounted usin
Slide 48: Consolidated balance sheet | Equity and liabilities
Appendix Consolidated balance sheet | Equity and liabilities EUR k 30.09.2020 31.12.2019 A. Equity Share capital 89,683 91,060 Capital reserves 128,652 155,222 Retained earnings Legal reserves 505 505 Currency translation difference -10,099 -4,818 Remeasurements of defined benefit plans according to
Slide 49: Financial calendar
Appendix Financial calendar 2021 February 25 ➢ Preliminary results 2020 March 18 ➢ Annual Report 2020 May 12 ➢ Quarterly Statement for the first quarter of 2021 June 23 ➢ Annual General Meeting, virtual August 5 ➢ Interim Report for the first half of 2021 November 11 ➢ Quarterly Statement for the fi
Slide 50: Contact
Appendix Contact KARIM BOHN MARTIN PRAUM Member of the Senior Managing Director Management Board | CFO Head of Investor Relations PATRIZIA AG T +49 821 50910-402 Fuggerstrasse 26 F +49 821 50910-399 86150 Augsburg M +49 151 19685445 Germany investor.relations@patrizia.ag MAXIMILIAN GERBER VERENA SCH