Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — 9M 2020 Earnings Presentation
30 slides from Grand City Properties Sa's earnings presentation, November 2020
Slide 1: 9M 2020 Financial Results Presentation
9M 2020 FINANCIAL RESULTS PRESENTATION NOVEMBER 2020 ESSEN
Slide 2: Table of Contents
TABLE OF CONTENTS BONN BERLIN DRESDEN LONDON Financial performance 1 9M 2020 Highlights 2 3 Guidance 4 Appendix and Portfolio update
Slide 3: 9M 2020 Highlights
9M 2020 HIGHLIGHTS 1 ROBUST OPERATIONAL PROFITABILITY DRIVING VALUE CREATION Net rental income +2.6% Revenue Adjusted EBITDA FFO I €279 million LFL €401 million €223 million €162 million -2% -4% +1% +1% Net profit -6% +0% FFO I per share FFO I per share Dividend of 65% of €342 million Net profit FFO
Slide 4: Business Profitability – Steady Operational Results
2 BUSINESS PROFITABILITY – STEADY OPERATIONAL RESULTS Selected consolidated statement of profit or loss 1-9/2020 1-9/2019 NET RENTAL INCOME (IN € MILLIONS) ADJUSTED EBITDA (IN € MILLIONS) in € ‘000 unless otherwise indicated Revenue 401,238 418,495 285 -2% +1% Net rental income 278,973 285,030 279 2
Slide 5: FFO I + II
2 FFO I + II FFO I PER SHARE (IN €) in € ‘000 unless otherwise indicated 1-9/2020 1-9/2019 Adjusted EBITDA 223,077 219,971 FFO I per share after perpetual (in €) FFO I per share (in €) CAGR Finance expenses (38,322) (33,987) FFO I per share Current tax expenses (22,563) (23,283) +5% Contribution fro
Slide 6: EPRA NAV – Sustainable Value Creation
2 EPRA NAV – SUSTAINABLE VALUE CREATION Sep 2020 Dec 2019 EPRA NAV (IN € MILLION) € ‘000 € Per share € ‘000 € Per share EPRA NAV EPRA NAV incl perpetual notes Equity per the financial statements 5,211,997 4,966,599 CAGR EPRA NAV Equity attributable to perpetual notes investors (1,030,574) (1,030,050
Slide 7: Investment Property – Value Gains Crystalized While Enhancing Portfolio Quality
INVESTMENT PROPERTY – VALUE GAINS CRYSTALIZED WHILE 2 ENHANCING PORTFOLIO QUALITY INVESTMENT PROPERTIES (IN € MILLIONS) 9M 2020 REVALUATION GAINS of approx. €270 million, supported by strong like-for-like 8,478 8,168 rental growth and decreasing yields with an average yield compression of 0.2% 196 6
Slide 8: Portfolio Overview
2 PORTFOLIO OVERVIEW DISTRIBUTION BY VALUE – SEPTEMBER 2020 Quality assets located in densely populated metropolitan regions with robust economic fundamentals and attractive demographic prospects complemented by geographic, economic and regulatory diversification built-in to the portfolio. PORTFOLIO
Slide 9: Portfolio NRW – September 2020
2 PORTFOLIO NRW – SEPTEMBER 2020 GCP is well positioned in Germany’s largest metropolitan area… PORTFOLIO DISTRIBUTION POPULATION DENSITY IN NRW 18%* 4th of GCP’s largest city Portfolio in Germany COLOGNE DORTMUND ESSEN WUPPERTAL * all breakdowns are by values
Slide 10: Best in Class Berlin Portfolio – September 2020
2 BEST IN CLASS BERLIN PORTFOLIO – SEPTEMBER 2020 PORTFOLIO OVERVIEW BERLIN 26% QUALITY LOCATIONS IN TOP TIER NEIGHBORHOODS OF BERLIN of GCP’s Portfolio Value 70% 70% of the Berlin portfolio is 17% located in top tier neighborhoods: of GCP’s Charlottenburg, Wilmersdorf, Mitte, Kreuzberg, Friedrichsh
Slide 11: High Quality London Portfolio – September 2020
2 HIGH QUALITY LONDON PORTFOLIO – SEPTEMBER 2020 LONDON PORTFOLIO WELL CONNECTED LONDON PORTFOLIO 17%* of GCP’s Portfolio Approx. 90% of the portfolio is The total London situated within a short walking portfolio, including pre- distance to an marketed units consists underground/overground station o
Slide 12: Portfolio East and North – September 2020
2 PORTFOLIO EAST AND NORTH – SEPTEMBER 2020 …with further diversification in Germany’s fast growing Eastern and largest Northern cities EAST PORTFOLIO NORTH PORTFOLIO 13%* 5%* of GCP’s of GCP’s Portfolio Portfolio DRESDEN LEIPZIG HALLE HAMBURG BREMEN * all breakdowns are by values
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: Capital Structure
2 CAPITAL STRUCTURE INTEREST HEDGING STRUCTURE SEPTEMBER 2020 FINANCING SOURCE MIX LTV DEVELOPMENT 6% 6% Bank Debt 45% Board of Directors’ limit 4% 5% 95% Hedged 34% 37% Straight Bond 36% 35% 3% 3% Convertible 34% 33% 57% 54% Equity 91% Perpetuals Dec Dec Dec Sep fixed & swapped 2017 2018 2019 2020
Slide 15: Solid Liquidity Position with Conservative Financial Platform
2 SOLID LIQUIDITY POSITION WITH CONSERVATIVE FINANCIAL PLATFORM DEBT AND INTEREST COVER RATIOS – 9M 2020 UNENCUMBERED ASSETS LIQUIDITY POSITION 5.8x 4.7x €6.7 bn over €1.3 billion 79% of value ICR* DSCR** LARGE POOL OF UNENCUMBERED ASSETS STRONG LIQUIDITY POSITION AMONG PEERS *) Adjusted EBITDA / in
Slide 16: Maintenance and Repositioning Capex
2 MAINTENANCE AND REPOSITIONING CAPEX Repositioning capex REPOSITIONING CAPEX AND MAINTENANCE (IN € PER AVG SQM) Increasing property quality Supporting value creation 15.9 Measures include: 15.2 o upgrading apartments for new rentals o staircases and public areas o installing playgrounds insta
Slide 17: Guidance
3 GUIDANCE FY 2020 Guidance FFO I (in € millions) 213-220 FFO I per share (in €) 1.27-1.31 Dividend per share (in €) 0.82-0.85 GUIDANCE CONFIRMED – GCP FFO I per share 1.07-1.11 REMAINS ON COURSE TO after perpetual notes attribution (in €) MEETING THE GUIDANCE Total net rent like-for-like growth 1.5
Slide 18: Appendix
GRAND CITY Properties S.A APPENDIX
Slide 19: COVID-19 – Agile and Adaptable
4 COVID-19 – AGILE AND ADAPTABLE The dynamic and innovative DNA of the Company has been vital in GCP’s ability to adapt to fast-changing situations, which in turn has mitigated possible effects of the COVID-19 pandemic Limited direct impact of the pandemic on underlying business operations During th
Slide 20: Berlin Rent Cap – Limited Effect on the Total Portfolio
4 BERLIN RENT CAP – LIMITED EFFECT ON THE TOTAL PORTFOLIO Berlin Mietendeckel (rent cap) was passed on January 30, 2020 and was implemented on February 23, 2020 - The law limits existing rents to 120% of the rent cap (including modernization & location-based adjustments). - Landlords will be require
Slide 21: Portfolio Potential
4 PORTFOLIO POTENTIAL CURRENT ANNUALISED NET RENTAL INCOME VS MARKET POTENTIAL* +8% 424 +20% 397 Only 3% of units ~9 years subject to rent restrictions from Average tenancy length Subsidization 331 Sep 2020 Annualized Full market potential annualized market potential (no Berlin rent cap) (incl. berl
Slide 22: ESG
4 ESG GCP publishes its Corporate Responsibility Report annually, 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 Company. The annual Sus
Slide 23: ESG Goals
© Esc coats GRAND CITY FOCUS AREAS @ sane GOALS TARGETS toes Create a high standard of living at our properties through safe, attractive buildings, active community building and engaged customer service a Retain residents by actively fostering tenant loyalty, by creating supportive, affordable commu
Slide 24: Proven Ability to Access Capital Markets
4 PROVEN ABILITY TO ACCESS CAPITAL MARKETS Proven track record Over €7 billion of capital raised since 2012, with a proven track record in 4 different instruments: Equity, Perpetual notes, Convertible bonds and Straight bonds across a broad spectrum of investors & markets €1,308 Mn €1,201 Mn €600 mi
Slide 25: Analyst Coverage
4 ANALYST COVERAGE Analyst Research Target Price 32 28 27.5 24 26.5 26.2 25.2 25.0 25.0 25.0 24.8 24.5 24.0 24.0 24.0 24.0 23.0 20 22.0 22.0 21.0 20.5 20.0 20.0 16 12 8 4 0 First Berlin UBS Citigroup Credit Suisse Kepler Commerzbank Berenberg DZ Bank J.P. Morgan Goldman Sachs Bank of America Deutsch
Slide 26: Share Development and Structure
4 SHARE DEVELOPMENT AND STRUCTURE GCP - Share Price and Total Return Since First Equity Placement (19.7.2012) Share price/conversion price throughout the Company’s issuances 24.81 *Refers to the conversion price of the convertible bonds issuance Frankfurt Stock Exchange **Effective conversion price
Slide 27: Management
4 MANAGEMENT Refael Zamir Mr. Zamir is Grand City’s Chief Executive Officer and CFO. Mr. Zamir has over 15 years of international experience in finance and accounting. Before joining GCP at the beginning of 2013, Mr. Zamir served Chief Executive Officer / as a manager for Ernst & Young in the real-e
Slide 28: Management
4 MANAGEMENT Senior Management (continued) Michael Bar-Yosef Mr. Bar-Yosef is responsible for financial modeling and cooperates with equity researchers to analyze their financial models. Before joining GCP he served as a financial and corporate analyst for a Senior Financial Analyst financial adviso
Slide 29: Credit Rating Matrix
4 CREDIT RATING MATRIX Financial risk profile 1 2 3 4 5 6 Min- Modest Aggre- High imal Intermediate Significant ssive Lever- aged GCP will continue strengthening its position within the business profile 1 Excellent aaa/ aa a+/a a- bbb bbb-/bb+ aa+ (Vonovia- BBB+)2) Business risk profile 2 (Aroundtow
Slide 30: Contact and Disclaimer
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 accordance
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