83 slides from Impact Developer & Contractor Sa's investor presentation, September 2023
Slide 1: September 2023
xO September 2023 iw mid-market L develoomertt IMPACT The beade
Slide 2: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICT
Slide 3: Table of contents
Table of contents 1. Executive summary 2. Company overview 1. At a glance 2. History 3. Projects 4. Our brands 5. Locations 6. Group structure 7. Awards 8. Stock price performance 3. Key investment highlights 1. Exposure to Romania’s very attractive macro in top locations 2. Growth 3. Proven operati
Slide 4: Executive summary
Executive summary ⎻ Impact Developer&Contractor (“IMPACT”) is the first privately owned company listed on the Bucharest Stock Exchange. The company has a long track record of delivering homes to Romania, c. 5,000 units completed since its inception; ⎻ IMPACT is a tested stock: it has been through tw
Slide 5: 1. Company overview
Creator of Communities Our mission is to positively impact people’s lives by developing communities focusing on sustainability, efficiency, and well-being. We generate added value for all our stakeholders through sound investments. 1. Company overview 5
Slide 6: IMPACT at a glance – key operating metrics
IMPACT at a glance – key operating metrics Comprehensive sizeable scale achieved al all relevant operating KPIs With a combined GDV of c. €2.0bn across our projects, we have achieved critical mass, while building green (NZEB, BREEAM). 6
Slide 7: IMPACT at a glance – key financial metrics
IMPACT at a glance – key financial metrics Highly profitable, low geared, inflation proof home builder million million million million million million The European Public Real Estate Association, is a non-profit association representing Europe's publicly listed property companies. It is run by an in
Slide 8: IMPACT - early history
IMPACT - early history 30 years of history. Resilient. Reliable. Successful 2004 IMPACT starts the 1997 works at the compounds Roua Residence in 2006 IMPACT starts the 1995 residential Ploiesti, Blume in The Company’s IMPACT launches on development in the Northern area of the Capital – 10 2002 IMPAC
Slide 9: IMPACT - early history
IMPACT - early history 30 years of history. Resilient. Reliable. Successful 2019 IMPACT completes the third phase of 2018 GREENFIELD 2016 Băneasa project, the Platanilor Compound, IMPACT with an area of 10 ha and 2010 commences the IMPACT completes 39 buildings with project LUXURIA 2017 phase two of
Slide 10: IMPACT - early history
IMPACT - early history 30 years of history. Resilient. Reliable. Successful 2022 2023 2020 2021 IMPACT completes the first phase of the IMPACT started construction for The company GREENFIELD Băneasa another 205 units IMPACT starts the largest project with an area of in GREENFIELD residential Băneasa
Slide 11: Our brands – our promises
Our brands – our promises A good, better, best approach to an evolving customer and location base Boreal is our community Our flagship brand offers Luxuria brand offers a blend of The epitome of new luxury development project catering to sustainable housing with an high-quality housing, living, Aria
Slide 12: Our track record of completions
Our track record of completions 1,321 homes 680 homes 2,368 homes 495 homes 2010 2015 2020 Bucharest, Oradea, Constanța Bucharest Bucharest Bucharest, Constanța Residential, Office Residential Residential Residential, Office, Commercial ✓ 11 successfully completed ✓ 680 high-quality residential ✓ 1,
Slide 13: Our locations – key locations in strategic points
Our locations – key locations in strategic points Our sites cover 50%+ of Romania’s population and 50%+ Of Romania GDP Current projects Completed projects Future projects & landbank Eurostat North-East (“NE”) Region City of Oradea Eurostat City of Iași North-West (“NW”) Region Population: 196K Green
Slide 14: Legal entities and projects in our group
Legal entities and projects in our group Projects and support activities clearly delimited GDV= €45mn Units=464 GDV=€630mn Units=3,963 GDV=€617mn Units=4,137 Bergamot Impact Alliance Impact Finance & RCTI Company Developments Developments Architecture Bergamot Developments Phase 2 } GDV= €115mn Unit
Slide 15: IMPACT – as recognized by others
IMPACT – as recognized by others We have won multiple accolades year after year, every year Strong recognition of excellence in customer service environment care and operating practice. 15
Slide 16: IMPACT – 10 year stock price performance
IMPACT – 10 year stock price performance Included in BETPlus (0.36%), BET-BK, BET-XT, BET-XT-TR, BET-XN-TRN (0.4%) 0.55 EPRA NAV H1-23/sh: 0.5456 0.50 52wk H: 0.5040 0.45 2023 NAV H1-23/sh: 0.3906 0.40 0.35 52wk avg: 0.3680 0.30 0.25 52wk Low: 0.2630 0.20 0.15 0.10 0.05 0.00 Sep-13 Sep-14 Sep-15 Sep
Slide 17: IMPACT relative value vs. world indices
IMPACT relative value vs. world indices IMPACT relative performance vs. indices clearly contributes to alpha creation 2900% IMP EPRA NAREIT DAX FTSE 100 SPX 2400% 1900% 1400% IMP 1406.6% 900% SPX 155% DAX 91% 400% FTSE 100 15% -100%May/13 Nov/13 May/14 Nov/14 May/15 Nov/15 May/16 Nov/16 May/17 Nov/1
Slide 18: IMPACT relative value vs. Romanian market
IMPACT relative value vs. Romanian market IMPACT stock price performance consistently beat the market 5y IMP price performance v. BET 10y IMP price performance v. BET BET IMP BET IMP 3011.8% 4.0x 30.0x 3.5x 25.0x 3.0x 2.5x 20.0x 2.0x 1972.9% 15.0x 1.5x 209.7% 1.0x 10.0x 0.5x 40.0% 5.0x 0.0x Mar-18 S
Slide 19: 2. Key investment highlights
Sustainable Buildings Our Vision: We strive to become the leading Residential Real Estate Developer through sustainable large-scale residential projects. 2. Key investment highlights 20
Slide 20: Key investment highlights
IMPACT Developer & Contractor S.A. Key investment highlights # HIGHLIGHT DESCRIPTION The Romanian economy is an “EU tiger” with only one year of decline since 2009. Residential development is supported by fundamental demand, driven by structural Exposure to Romania’s very 1 deficit for homes in majo
Slide 21: Exposure to Romania’s macro
22 Exposure to Romania’s macro
Slide 22: Romania: macro view and market sizing
Romania: macro view and market sizing On relative and absolute basis Romania has attractive market fundamentals 2022E GDP: $301bn 2022E GDP($ in bn) : Romania is the 2nd largest economy in CEE, growing 679 2022E GDP growth: 5.9% faster than the peer group GDP per capita (PPS(1)): €30K p.cap. 301 254
Slide 23: Romania housing market
Romania housing market Demand side: culturally inclined, structurally in excess v. supply Housing stock statistics Affordability ⎻ Romania has approximately 9.6m households, of which Bucharest accounts for ⎻ Since most of the properties were acquired in the ‘90s from the state, the largest portion a
Slide 24: Romania housing market (cont.)
Romania housing market (cont.) Demand side: strong solvability of demand Asset prices still at the lowest relative points in EU RO has one of the highest salary/home purchase power ⎻ Since most of the properties were acquired in the ‘90s from the state, Romania is the EU country with the lowest outs
Slide 25: Romania housing market (cont.)
Romania housing market (cont.) Supply side: outdated built stock and structural deficit Accumulated structural deficit to keep homebuilders busy Dwelling deliveries in Romania 2014-2021 by region ⎻ Existing housing stock has 3 ages: pre-WW2; communist regime & transition; newly built. The first two
Slide 26: Romania housing market (cont.)
Romania housing market (cont.) Supply side: permitting cycle and no. permits, housing stock Building permits: not coping with demand Unit sales statistics ⎻ Romanian authorities have issued from 2015 -2022 c. 41K permits per year, at 55 No Permits Issued (K) 51.3 the national level, with the excepti
Slide 27: Growth
28 The trader iw mid-market residential development IM PACT
Slide 28: Romania: growth boosters
Romania: growth boosters ⎻ Booster 1: Romania is a candidate state for accession in the Schengen area. Despite the Austrian opposition in 2022, there is a reasonable expectation that the country will accede to the Schengen area in 2023 ⎻ Analysis: membership in the Schengen area is expected to add c
Slide 29: Regional relative growth potential
Regional relative growth potential Strong average pull effect expected vis-à-vis “deja-vu” dynamics Economic development to trigger catch-up to Wave 1 countries CEE Wave 2 (RO&BG) prices vs. CEE Wave 1 (CZ,HU PL) ⎻ CEE accession to the EU happened in 2 waves: Wave 1 countries, Czech Avg. Price per s
Slide 30: Revenue-cost “scissors” – CEE new dwellings
Revenue-cost “scissors” – CEE new dwellings Romania’s revenue-cost “scissors” wrong way opening is unique CEE new dwelling index dynamic for cost and revenues Revenue-cost scissors opening in all countries but RO 150 ‒ We analyzed Wave 1 (Czech, Hungary Poland) and Wave 2 (Romania, Bulgaria) ND Pric
Slide 31: Proven operational excellence
32 Proven operational excellence
Slide 32: Outstanding management team
Outstanding management team Centuries of experience and education domestic and international CONSTANTIN SEBEȘANU CLAUDIU BISTRICEANU SORIN APOSTOL CRISTOVAO ROCHA CEO CFO EXECUTIVE DIRECTOR DEVELOPMENT DIRECTOR 25+ years of experience in top 20+ years of experience in 20+ years of experience in 17+
Slide 33: Our operating framework
Our operating framework We have carefully designed our operating framework on solid foundation Best Digitalization & Customer Innovation & Vertical practice + Smart Solutions + centricity + Standardization + Integration Property & Facility Partnership created for use Management services for of prefa
Slide 34: Mapping our operating framework to gains
Mapping our operating framework to gains By standardizing our business process, we achieve significant profitability Best Digitalization & Customer Innovation & Vertical practice + Smart Solutions + centricity + Standardization + Integration ✓ Save c. six months ✓ Stabilize and ✓ Sized for demand ✓
Slide 35: Our business cycle
Our business cycle A 3-stage process, with a span of 3-7 years from concept to reception ⎻ Preliminary concept all the way to final ⎻ Zoning & building permit ⎻ Construction split by phase and sub- ⎻ Regularly re-assessed for best use to ⎻ Duration depends on local authorities. phase for efficiency,
Slide 36: Business model & financial strength
37 Business model & financial strength
Slide 37: Balance sheet
Balance sheet Double digits growth and low leverage (€ in mn) CAGR Growth BALANCE SHEET 2020 2021 2022 6.2023* ⎻ Our core operating positions on the balance sheet, Inventories 2020-2022 Cash & equivalents 12.1 8.5 11.1 10.6 nm (completed and WIP units) and Investment Property showed a Trade receivab
Slide 38: Income Statement
Income Statement Exceptional margins and resilient bottom line (€ in mn) Topline LTM CAGR ⎻ Sales dipped in 2021 on the back of COVID (with a 1y lag) and PROFIT & LOSS 2020 2021 2022 6.2023* 2020-2022 other disruptive events, only to recover swiftly in 2022; Revenues € 42.3 € 28.0 € 44.4 € 38.2 2.6%
Slide 39: Cash flow statement
Cash flow statement Exceptional margins and resilient bottom line (€ in mn) Operating cash flows: 2020 2021 2022 LTM 6.2023* ⎻ Cash from operations in 2021 and 2022 reflect a slow-selling OPERATING ACTIVITIES market as a result of COVID lockdowns and subsequent inflation Net result 15.5 16.0 17.2 21
Slide 40: Bridging the reported NAV to EPRA NAV
Bridging the reported NAV to EPRA NAV Insightful measure of tapped value reflected in the EPRA NAV EPRA, the European Public Real Estate Association, is the voice of the publicly traded European real estate sector. Founded in 1999, EPRA is a not-for-profit association registered in Belgium. With mor
Slide 41: IMPACT - Projects
IMPACT - Projects GBA 1mn+ sqm, GDV 1.9 bn+ and 10k+ units. Our current and future projects 106,000 sqm 44,730 sqm 103,316 sqm 109,269 sqm 358,755 sqm 53,662 sqm 200,277 sqm €163 €52 €175 €394 €617 €97 €370 mn mn mn mn mn mn mn 1,167 units 464 units 1,062 units 874 units 4,137 units 598 units 2,198
Slide 42: IMPACT - Projects
IMPACT - Projects Current and future projects GBA GDV Land Cons. cost Sales fees Land area Avg. Price Project No of units (sqm) (€ mn) (€ mn) (€ mn) (€ mn) (sqm) px/unit (€) (€/ sqm) Phase 4 Bucharest 106,000 163 12 90 4 57,129 1,167 121,769 1,546 Phase 2&3 Constanta 44,730 52 6 36 1 25,118 464 103,
Slide 43: Land bank: locations and KPIs
Land bank: locations and KPIs Our strategic land plots have an unreleased value of €21 mn, stand at c. 63ha and have a duration of 35y Greenfield Băneasa* Aria Verdi Greenfield Copou 3,963 units 37 ha 874 units 3 ha 1,062 units 5 ha BV = €69mn Mkt val =€81mn BV = €36mn Mkt val =€36 BV = €8mn Mkt val
Slide 44: Land bank
Land bank Area Book value Market value Ha € mn € mn € /sqm Bucharest - Greenfield Băneasa 37.5 68.6 85.0 227 Bucharest - Bd Barbu Vacarescu (Aria Verdi) 2.5 36.9 36.9 1,450 Bucharest - Bd Timisoara – Bd Ghencea (Greenfield West) 25.9 32.4 32.4 125 Constanța - Boreal Plus 3.2 1.7 6.4 203 Iași – Green
Slide 45: 3. ESG focus
Creator of Communities Our Mission: We strive to become the leading Residential Real Estate Developer through sustainable large-scale residential projects. 3. ESG focus 46
Slide 46: Our approach to sustainability
Our approach to sustainability State of the art ESG framework, based EU taxonomy Our ESG Path Our ESG Path ⎻ At IMPACT we believe in sustainable development as the only ⎻ At IMPACT are committed to the “blueprint to achieve a better way forward. We complement it with a focus on business ethics and m
Slide 47: Our approach to sustainability (cont.)
Our approach to sustainability (cont.) Sustainable development the way forward Our operating bricks Our reporting ⎻ We have committed to the highest standards of ethical behavior, ⎻ Starting with 2021 reporting on our sustainability and we acknowledge the importance of high environmental and journey
Slide 48: Corporate governance
Corporate governance Strong and balanced board, in full compliance with BSE governance policy Iuliana-Mihaela URDĂ Petru VĂDUVA Daniel PANDELE Ruxandra-Alina SCARLAT Sorin APOSTOL Chairperson Independent Independent Non-Independent Non-Independent Non-Executive Director Non-Executive Director Chairm
Slide 49: Organization structure
Organization structure Consistent with legal and BVB corporate governance code requirements IMPACT's corporate culture is characterized by clear responsibilities, professionalism, mutual respect, and trust. Lawful conduct, total transparency, and fair competition are integral to our business to achi
Slide 50: ISO Certification
ISO Certification CERTIFICATES 51
Slide 51: 4. Portfolio book
Sustainable Buildings Our Vision: We strive to become the leading Residential Real Estate Developer through sustainable large-scale residential projects. 4. Portfolio book 52
Slide 52: Baneasa Residence IMPACT
BANEASA RESIDENCE 53 IMPACT
Slide 53: Greenfield Residence – our first community creation
Greenfield Residence – our first community creation This is our Crown Jewel community with more than 2,000 households! Phase 6 Phase 5 D40 (2020-2021) Panoramic (2020-2022) 2,700+ units 598 units 41 units 97 units Plaza (2022) 14,383 sqm • Greenfield Plaza • Retail Phase 1 (2006-2010) • Office 680 u
Slide 54: Greenfield Residence Bucharest
Greenfield Residence Bucharest Current projects in 5 stages out of which 3 with will be delivered in 2023 Developed at the highest standard in the affordable housing segment and located in District 1 of Bucharest, in the vicinity of Baneasa Forest, Greenfield Baneasa, brings a unique combination of
Slide 55: Greenfield Residence Bucharest
Greenfield Residence Bucharest Future projects Its unique location, along with the quiet environment and with good air quality, are traits that make Greenfield Baneasa the ideal place for families with children, nature lovers, or people in search of a healthy lifestyle, since it has all the qualitie
Slide 56: Greenfield Residence Bucharest
Greenfield Residence Bucharest 0.5% 22.5% 29% studio GDV 1 bedroom €630 mn 2 bedroom 3 bedroom 48% Two additional phases c.2,800 units with zoning with 595 in the last stage for building permit. 57
Slide 57: Greenfield Residence Bucharest
Greenfield Residence Bucharest 62 – 69 sqm 73 – 88 sqm 103 – 109 sqm 2,700+ units to be further developed. 58
Slide 58: Greenfield Plaza
Greenfield Plaza Key data 21,496 sqm Land Area 6,485 sqm Building Footprint sqm Gross Lettable Area 13,806 including 4,472 Outdoor Amenities Area CAR WASH O P 264 units Parking Spaces P 4 units EV Charging Station W P W kWp 84 Photovoltaic Panels 55 kW Solar Panels R Note: Outdoor amenities include
Slide 59: Luxuria Residence
RA LUXURIA —— Residence —— IMPACT
Slide 60: Luxuria Residence Bucharest
Luxuria Residence Bucharest Phase 2 (2019-2020) 232 units Phase 3 (2020-2021) Phase 1 (2018-2020) 130 units 268 units First BREEAM Excellent certified residential project in Romania, proof of our commitment to sustainability. 61
Slide 61: Luxuria Residence Bucharest
Luxuria Residence Bucharest First residential complex certified BREEAM Excellent from Romania Luxuria brand offers a blend of high-quality housing, contemporary amenities and eco-friendly environment that promote a balanced urban lifestyle. KPIs of the project GDV €115 mn GBA 66k sqm Land Cost €9 mn
Slide 62: Luxuria Residence Bucharest
Luxuria Residence Bucharest 10 10 200 studio 200 GDV 1 bedroom 2 bedroom €115 mn 3 bedroom premium 200 With 9,650 sq green area, Luxuria Residence is a park between parks. 63
Slide 63: Luxuria Residence Bucharest
Luxuria Residence Bucharest 53 – 69 sqm 65 - 89 sqm 90 – 176 sqm High quality project with excellent finishes. 64
Slide 64: IMPACT
IMPACT
Slide 65: Boreal Plus Constanța
Boreal Plus Constanța Phase 3 332 units Villas (2019-2021) 18 units Phase 2 132 units Phase 1 (2020-2022) 209 units Completing previous development with 670+ units. 66
Slide 66: Boreal Plus Constanța
Boreal Plus Constanța Boreal Plus future phases In the North of Constanta, away from the agitation and pollution of the city, Boreal, a residential compound where 150 families have started a new life, was built. In the immediate proximity, Boreal Plus is now being developed. Every family needs a pla
Slide 67: Boreal Plus Constanta
Boreal Plus Constanta 67 167 studio GDV 1 bedroom €52mn 2 bedroom 230 With 9,650 sq green area, Luxuria Residence is a park between parks. 68
Slide 68: Boreal Plus Constanța
Boreal Plus Constanța 68 – 71 sqm 73 – 100 sqm 105 – 110 sqm High quality project with excellent finishes. 69
Slide 69: Greenfield West Residence
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Slide 70: Greenfield West Bucharest
Greenfield West Bucharest Phase 7 Phase 2 Phase 5 309 units 476 units 595 units Phase 8 504 units Phase 3 475 units Phase 6 Retail spaces, Events 364 units hall, learning spaces Phase 4 Phase 1 570 units 780 units 4,000+ units to be developed in several phases. Ample community center. 71
Slide 71: Greenfield West Bucharest
Greenfield West Bucharest Located in District 6 of the capital, Greenfield West is a project that enjoys credibility from the perspective of the brand history. Like the project in Baneasa area, Greenfield West approaches a minimalist modern architecture and offers the highest standard of constructio
Slide 72: Greenfield West Bucharest
Greenfield West Bucharest 8 194 257 studio GDV 1 bedroom €617mn 2 bedroom 3 bedroom 603 4,000+ units to be developed in several phases. Ample community center & retail spaces. 73
Slide 73: Copou Residence
Bae | COPOU RESIDENCE REENFIELD&® le
Slide 74: Greenfield Copou Iași
Greenfield Copou Iași Phase 1.2 Phase 1.1 Phase 2.2 298 units 351 units 221 units Commercial, Phase 2.1 wellness, learning 264 units c.1,100 apartments with the best view near Iași botanical garden 75
Slide 75: Greenfield Copou Iași
Greenfield Copou Iași In full harmony with the unique natural environment in which it will be built, Greenfield Copou will replicate the Greenfield housing model. The apartments will benefit from premium finishes and will offer spectacular views of the city and the Botanical Garden in low-height reg
Slide 76: Greenfield Copou Iași
Greenfield Copou Iași 8 194 257 studio GDV 1 bedroom €175mn 2 bedroom 3 bedroom 603 With 9,650 sqm green area, Luxuria Residence is a park within a park. 77
Slide 77: Greenfield Copou Iași
Greenfield Copou Iași 51 – 65 sqm 63 – 83 sqm 95 – 119 sqm Aligned to nZEB standards and targeting BREEAM Excellent certification. 78
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Slide 79: Aria Verdi Bucharest
Aria Verdi Bucharest Aria Verdi is the flagship project in our current portfolio, positioned in a market segment of premium value and high margins. 80
Slide 80: Aria Verdi Bucharest
Aria Verdi Bucharest Located in one of the most beautiful and desirable areas of Bucharest, Aria Verdi will offer a spectacular view of the city, surrounded by green spaces and lakes. With a modern architecture and various integrated amenities, the new project aims to raise the standard of quality o
Slide 81: Aria Verdi Bucharest
Aria Verdi Bucharest 3% 10% 170 studio 14% 1 bedroom GDV 2 bedroom €394mn 3 bedroom premium 53% Quality of living for premium segment. 82
Slide 82: Aria Verdi Bucharest
Aria Verdi Bucharest Aligned to nZEB standards and targeting BREEAM Excellent certification. 83
Slide 83: Contact information Impact Developer & Contractor
Contact information Impact Developer & Contractor Greenfield Băneasa 31-41 Pădurea Mogoșoaia Road District 1, 014043 Bucharest, Romania Phone: +40 729 100 003 IR@ImpactSA.ro 84