Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — Q1 2019 Earnings Presentation
32 slides from Grand City Properties Sa's earnings presentation, May 2019
Slide 1: Q1 2019 Financial Results Presentation
Q1 2019 FINANCIAL RESULTS PRESENTATION MAY 2019 Berlin
Slide 2: Table of Contents
Table of Contents 1 Financial Highlights 2 Financial and Portfolio performance 3 ESG 4 Guidance 5 Appendix 2
Slide 3: Financial Highlights Q1 2019
1 FINANCIAL HIGHLIGHTS Q1 2019 Net profit Rental and Solid rental Net rental income Adjusted EBITDA €125 million growth operating income €94 million €73 million EPS (Basic) €139 million €0.65 FFO I per share FFO I per share 65% of FFO I Rising operational FFO I after perpetual notes profitability €0
Slide 4: Profit & Loss
2 PROFIT & LOSS NET RENTAL INCOME (IN € MILLIONS) ADJUSTED EBITDA (IN € MILLIONS) Selected Income Statement Data 1-3/2019 1-3/2018 in € ‘000 unless otherwise indicated Revenue 139,089 132,688 Rental and operating income 139,089 132,438 94 Net rental income 94,238 90,155 90 73 Property revaluations a
Slide 5: FFO I + II
2 FFO I + II 1-3/2019 1-3/2018 FFO I (IN € MILLION) FFO I PER SHARE (IN €) in € ‘000 unless otherwise indicated Adjusted EBITDA 72,589 67,758 0.32 0.30 Finance expenses (11,787) (11,412) 0.26 0.27 (6,988) (6,468) 53 Current tax expenses 49 Contribution to minorities (1,148) (417) FFO I 52,666 49,461
Slide 6: EPRA NAV
2 EPRA NAV Mar 2019 Dec 2018 EPRA NAV (IN € MILLIONS) € ‘000 Per share € ‘000 Per share Equity per the financial statements 4,743,707 4,666,987 EPRA NAV EPRA NAV Incl. perpetual notes Equity attributable to perpetual notes investors (1,013,937) (1,030,050) 4,783 4,918 Equity excluding perpetual note
Slide 7: Investment Property
2 INVESTMENT PROPERTY INVESTMENT PROPERTIES DEVELOPMENT (IN € MILLIONS) ACQUISITION CRITERIA Acquisition in densely populated areas and major cities 7,244 7,495 6,388 High cash flow generating assets 4,796 Vacancy reduction potential Rent level per sqm is below market level (under-rented), upside po
Slide 8: Portfolio Overview
2 PORTFOLIO OVERVIEW Diversification among areas of sustainable economic fundamentals and demographic prospects PORTFOLIO OVERVIEW MARCH 2019 Value Area EPRA Annualized In-place rent Number of units Value Rental yield (in €M) (in k sqm) Vacancy net rent per sqm per sqm (in €M) (in €) (in €) NRW 2,00
Slide 9: Portfolio Distribution
GB 2 PORTFOLIO DISTRIBUTION DISTRIBUTION BY VALUE MARCH 2019 London Hamburg Bremen Berlin NRW Halle Leipzig Dresden Frankfurt Nuremberg/ Mainz Fuerth Kaiserslautern Mannheim Focus on value-add opportunities in densely populated Munich metropolitan areas 9
Slide 10: Best in Class Berlin Portfolio – March 2019
2 BEST IN CLASS BERLIN PORTFOLIO – MARCH 2019 Berlin is the single largest city in the portfolio PORTFOLIO OVERVIEW BERLIN QUALITY LOCATIONS IN TOP TIER NEIGHBORHOODS OF BERLIN* 21% of GCP’s Portfolio 2/3 of the Berlin portfolio is 2/3 located in top tier neighborhoods: Charlottenburg, Wilmersdorf,
Slide 11: Portfolio NRW – March 2019
2 PORTFOLIO NRW – MARCH 2019 GCP is well positioned in Germany’s largest metropolitan area… PORTFOLIO DISTRIBUTION 27% POPULATION DENSITY IN NRW of GCP’s Portfolio 4th largest city in Germany Dortmund Duisburg Essen Wuppertal Cologne 11
Slide 12: Portfolio East and North – March 2019
2 PORTFOLIO EAST AND NORTH – MARCH 2019 …with further diversification in Germany’s fast growing Eastern and largest Northern cities EAST PORTFOLIO NORTH PORTFOLIO 15% 5% of GCP’s of GCP’s Portfolio Portfolio Leipzig Dresden Halle Hamburg Bremen 12
Slide 13: High Quality, Well Connected London Portfolio – March 2019
HIGH QUALITY, WELL CONNECTED LONDON PORTFOLIO - 2 MARCH 2019 The total London Portfolio, including pre-marketed units amounts to nearly 2,000 units Portfolio overview London Well connected London portfolio 11% of GCP’s Portfolio Over 90% of the portfolio is situated within a short walking distance t
Slide 14: Development Rights – Supporting the Value Creation Process
DEVELOPMENT RIGHTS – SUPPORTING THE VALUE 2 CREATION PROCESS In recent periods GCP identified value reserves in the form of development rights. Development rights have been extracted primarily in Berlin, where the land value has increased substantially and the demand for new building is surging As o
Slide 15: 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 16: Loan-to-Value
2 LOAN-TO-VALUE in € ‘000 unless otherwise indicated Mar 2019 Dec 2018 Investment property* 7,453,497 7,298,879 COST OF DEBT Investment property of assets held for sale 191,756 132,137 Equity accounted investees 24,949 26,207 Low spreads (17/5/2019) Total value 7,670,202 7,457,223 1.5% Series D 2021
Slide 17: Capital Structure
2 CAPITAL STRUCTURE INTEREST HEDGING STRUCTURE FINANCING SOURCE MIX 5% 11% 8% Bank Debt 7% 95% Hedged 29% Straight Bond 27% 3% 3% Convertible 88% 59% 60% Equity fixed & swapped capped Dec 2018 Mar 2019 variable ø Maturity as at ø Maturity as at ø Maturity as at ø Maturity as of year end 2016 year en
Slide 18: Debt Coverage and Credit Rating
2 DEBT COVERAGE AND CREDIT RATING DEBT AND INTEREST COVER RATIOS – MAR 2019 UNENCUMBERED ASSETS 6.2x €5.8 BN 5.2x €4.8 BN 76% of value €4.1 BN 65% of value €2.8 BN 64% of value 56% of value ICR* DSCR** *) Adjusted EBITDA / interest **) Adjusted EBITDA / (interest + loan amortization) Dec Dec Dec Mar
Slide 19: Maintenance, Capex and Modernization
2 MAINTENANCE, CAPEX AND MODERNIZATION CAPEX STRATEGY Repositioning capex Modernization Pre-letting modifications Increasing property quality Improving standards of Bring newly built and/or re- Support value creation apartments opening of converted/ REPOSITIONING CAPEX AND MAINTENANCE Meas
Slide 20: ESG - Outperformer
3 ESG - OUTPERFORMER Starting from 2018, GCP publishes its Corporate Responsibility report on an annual basis, demonstrating its commitment to sustainability by presenting to investors, business partners, employees and other stakeholders its activities and achievements and to embed the high ESG crit
Slide 21: 2019 Guidance
4 2019 GUIDANCE FY 2019 Guidance FFO I (in € millions) 211-213 FFO I per share (in €) 1.26-1.27 Guidance confirmed Dividend per share (in €) 0.82-0.83 FFO I per share 1.06-1.07 after perpetual notes attribution (in €) Total net rent like-for-like growth >3.5% LTV <45% Operational profitability and i
Slide 22: Appendix
5 APPENDIX 22
Slide 23: Portfolio Potential
5 PORTFOLIO POTENTIAL RESIDENTIAL IN-PLACE RENT COMPARED TO MARKET RENT CURRENT ANNUALIZED NET RENTAL INCOME VS MARKET POTENTIAL 467 364 84% 16% Mar 2019 Annualized below market level at market level annualized market potential* * including vacancy reduction 5% of units 10 years subject to rent rest
Slide 24: Proven Ability to Access Capital Markets
5 PROVEN ABILITY TO ACCESS CAPITAL MARKETS Mar-19 Issuance of Series P, 2029 straight bonds of HKD 290m under EMTN, full currency hedge to Euro, effective coupon of 1.4% p.a.+3 month Euribor Feb-19 Issuance of Series O, 2034 straight bonds of €15m under the EMTN, effective coupon of 1.7% p.a. +3
Slide 25: Analyst Coverage
5 ANALYST COVERAGE ANALYST RESEARCH TARGET PRICE GCP‘s operations are researched by leading real estate market analysts, who Key Index inclusions: conduct independent equity research and target price recommendations MDAX FTSE EPRA/NAREIT Global Developed Europe Developed Eurozone Germany
Slide 26: Share Development and Structure
5 SHARE DEVELOPMENT AND STRUCTURE SHARE PRICE AND TOTAL RETURN SINCE FIRST EQUITY PLACEMENT (19.7.2012) Share Price Since First Equity Placement (19.7.2012) SHARE PRICE/CONVERSION PRICE SHARE OWNERSHIP STRUCTURE THROUGHOUT THE COMPANY’S ISSUANCES Basic amount of shares: 166.7 million/ Fully diluted
Slide 27: Bond Spreads
5 BOND SPREADS STRAIGHT BOND SERIES D SPREAD OVER MID-€-SWAP, REMAINING 2.5 YEARS STRAIGHT BOND SERIES E SPREAD OVER MID-€-SWAP, REMAINING 6 YEARS 3.75% PERPETUAL NOTES SPREAD OVER MID-€-SWAP 27
Slide 28: Management
5 MANAGEMENT CEO Christian Windfuhr Mr. Windfuhr is Grand City Properties’ CEO. Before joining Grand City Mr. Windfuhr served as CEO of Maritim Hotels, with 40 hotels in Germany. Prior to this he served as CEO of Mövenpick. He achieved the financial turnaround of Mövenpick, drove international expan
Slide 29: Management
5 MANAGEMENT Senior Management (continued) Uwe Schillinger Mr. Schillinger is GCP’s Director for Technical Service and responsible for the Facility Management. He has 12 years experience in facility management Head of Facility Management and joined GCP in 2006. Mr. Schillinger is an engineer in elec
Slide 30: Credit Rating Matrix
5 CREDIT RATING MATRIX 1 2 3 4 5 6 Min Modest Aggre- High Moody's 12-18 Month - Intermediate Significant ssive Lever- REITs and Other Commercial Property Forward View As of imal aged Firms Industry Grid [1][2] 09/18/2018 [3] 1 aaa Excellent bbb- / aa a+/a a- bbb /bb+ aa+ Factor 1: Scale (5%) Measure
Slide 31: Maintaining Strong and Diverse Financing Sources
MAINTAINING STRONG AND DIVERSE 5 FINANCING SOURCES GCP HAS DOZENS OF NON-RECOURSE SEPARATE BANK LOANS FROM VARIOUS BANKS AND MAINTAINS STRONG RELATIONS WITH A RANGE OF BANKS AND CREDIT PROVIDERS 31
Slide 32: Contact and Disclaimer
5 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 accordanc
Grand City Properties — Q1 2019 Earnings Presentation on 6ix