Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — FY2014 Earnings Presentation
49 slides from Altarea Sca's earnings presentation, 2015
Slide 1: Annual Results 2014
\ ALTAREA COGEDIM ANNUAL RESULTS 2014 RETAIL RESIDENTIAL OFFICES AND HOTELS
Slide 2: Disclaimer
DISCLAIMER • This presentation has been prepared for general information purposes only, as a complement to the informations already released by Altarea Cogedim, which the lectors are kindly invited to refer to. It does not constitute an offer to sell or a solicitation of an offer to sell or exchange
Slide 3: Contents
CONTENTS INTRODUCTION P. 4 2014 ACHIEVEMENTS P. 7 FINANCE P. 17 GROWTH DRIVERS P. 25 APPENDICES P. 38 2014 ANNUAL RESULTS 3
Slide 4: Introduction
INTRODUCTION 2014 ANNUAL RESULTS 4
Slide 5: Altarea Cogedim: an unparalleled model
ALTAREA COGEDIM: A UNPARALLELED MODEL A real estate offering that covers all asset categories A UNIQUE (retail, residential, offices, hotels, etc.) DEVELOPMENT MODEL Strategic positions in high-growth metropolitan areas (Greater Paris, Greater Lyon, Nice Metropolitan Area, Bordeaux, Toulouse, et
Slide 6: 2014 Financial Results
2014 FINANCIAL RESULTS • Results in line with guidance • Impact of the risk reduction willingness (debt reduction and stepping up of sales) • Priority given to the future: strengthen development and the innovation policy Consolidated FFO (1) €166.5 million -0.7% FFO (Group share) €126.2 million -11.
Slide 7: 2014 Achievements
2014 ACHIEVEMENTS 2014 ANNUAL RESULTS 7
Slide 8: Shopping Centers: Iconic Achievements
SHOPPING CENTERS ICONIC ACHIEVEMENTS • Strong development activity • Premium assets PARIS-MONTPARNASSE RAIL STATION CAP 3000, NICE QWARTZ, GREATER PARIS (selected following competition) (construction started) (delivery) Strong location, large size, multi- Ambitious waterfront 1st connected shopping
Slide 9: Shopping Centers: Portfolio Concentration on Premium Assets
SHOPPING CENTERS PORTFOLIO CONCENTRATION ON PREMIUM ASSETS • Like-for-like growth in net rental income (+2.8%) • Excellent operational performance by French assets (87% of the portfolio) • International (13% of the portfolio): net rental income up sharply (+7.3% in Italy and +3.4% in Spain) OPERATIO
Slide 10: Residential: Success of the Offering
ROGEMENT L ESIDENTIAL FORTE S UCCESS CROISSANCE DES VENTES (+43% EN VOLUME) OF THE OFFERING • Growth in entry-level and midscale ranges driven by sales to institutional investors • Pricing policy in line with the market • Extension of the range with a new offering (Histoire & Patrimoine) BREAKTHROUG
Slide 11: Residential: Strong Increase in Volumes
RESIDENTIAL STRONG INCREASE IN VOLUMES • Successful product positioning in entry-level and midscale • Lower results in 2014 (margin reduction and "Laennec base effect" from 2013) RESERVATIONS: +21% (1) RESULTS Revenue €755 mil. -15% High-end 22% -2% Excl. Laennec Entry-level and midscale Serviced re
Slide 12: Offices: Strong Activity on All Segments
OFFICES STRONG ACTIVITY ON ALL SEGMENTS • A comprehensive operating model (investor, property developer, service provider) • Strong increase in the number of projects underway (7 programs secured in 2014 totaling 1.4 million ft² or 130,000 m²) INVESTMENT PROPERTY DEVELOPMENT SERVICE PROVIDER Richeli
Slide 13: Offices: A New Growth Cycle
OFFICES A NEW GROWTH CYCLE • Strong growth in operating cash flow (+15%) • New programs in 2014: deferred impact on income PORTFOLIO OF SECURED PROJECTS (1) A MIXED REVENUE MODEL No. of Surface area Amount (Group Amount projets at 100% share) (2) Property dev. Net property income (Prop. dev. Cont. /
Slide 14: Sustainable Development: Recognized Leadership
SUSTAINABLE DEVELOPMENT RECOGNIZED LEADERSHIP • Sustainable development: a strategic issue for the Group • Outstanding non-financial results NO. 1 IN EUROPE NO. 1 IN FRANCE CATEGORY “COMMITTED” • 1er No.1 European company out of 62 1st rank among developers and listed groups, 9th worldwide out o
Slide 15: Sustainable Development: An Exemplary Energy Performance
SUSTAINABLE DEVELOPMENT AN EXEMPLARY ENERGY PERFORMANCE • A high-level requirement integrated from the start and the buildings design • Accelerated improvement of the performance on the existing portfolio • A long-term impact on the carrying cost of the assets (rental expenses notably) CO2 EMISSION
Slide 16: Sustainable Development: A Corporate Citizen
SUSTAINABLE DEVELOPMENT A CORPORATE CITIZEN • A broad and very significant employment footprint • A positive local and national contribution GROUP EMPLOYMENT FOOTPRINT KEY FIGURES 10,400 ancillary jobs (1) 21,400 jobs supported directly and indirectly by the Group 9,700 indirect and related jobs (2)
Slide 17: Finance
FINANCE 2014 ANNUAL RESULTS 17
Slide 18: Financial Results
FINANCIAL RESULTS Shopping Centers €161.8 mil. Online retail -€19.0 mil. Residential €40.6 mil. FFO IN LINE WITH Offices €17.8 mil. GUIDANCE Operating cash flow (1) €201.8 mil. -7.7% Consolidated FFO (2) €166.5 mil. -0.7% FFO (Group share) €126.2 mil. -11.3% DILUTION OF FFO per share €10.47 /share -
Slide 19: Operating Cash Flow
OPERATING CASH FLOW (1) • Retail and offices: positive impacts of the strategic repositioning initiated few years ago • Residential: margin reduction and Laennec base effect (2) • E-commerce: competitive price pressure on high-tech products OPERATING CASH FLOW CHANGE IN CONTRIBUTION BY BUSINESS + •
Slide 20: FFO and Net Income
FFO AND NET INCOME • Slight drop in consolidated FFO (1) • Net consolidated income (2) impacted by financial instruments and the tax effect • Net Profit (Group Share): €114.3 million (impact of partnerships) FFO (-0,7%) NET CONSOLIDATED INCOME (+18%) €260.0 mil. +62.8 €167.7 mil. €166.5 mil. €166.5
Slide 21: Per-Share Indicators
PER-SHARE INDICATORS • A reduction in per-share indicators mainly due to debt reduction measures (€495 million in equity raised) FFO / SHARE NAV / SHARE (3) €12.5 €12.7 -0.2 +10.1 -10.0 €133.3 (-1.3%) €134.1 -0.8 €129.8 (-0.6%) -1.8 -1.7 2014 Change -1.3 2014 2014 Other (4) (-3.2%) €10.5 Value Divid
Slide 22: A Strengthened Financial Structure
A STRENGTHENED FINANCIAL STRUCTURE • Quick and massive debt reduction (fundraising, partnerships, disposals) • Strong re-investment capacity CONSOLIDATED EQUITY (1) LTV (2) €2.2 bil. 51.2% 49.3% €1.8 bil. €1.4 bil. 41.7% €1.1 bil. 37.7% 2011 2012 2013 2014 2011 2012 2013 2014 (1) Group share and oth
Slide 23: Optimized Financial Resources
OPTIMIZED FINANCIAL RESOURCES • Diverse financial resources • Average cost of debt in the medium term between 2% and 2.5% all in NET CONSOLIDATED DEBT A SOUND FINANCIAL STRUCTURE €1,772 mil. Net debt -€65 mil. Property development debt Corporate bank debt Average cost 2.41% 11% 22% Term 3.7 years o/
Slide 24: Dividend
DIVIDEND • €10 dividend per share for FY2014 proposed at the General Meeting of June 5, 2015 • €10.00 dividend including: • €9.72 /share as repayment of share premiums • €0.28 /share as distribution of tax-exempt income (SIIC) 2014 ANNUAL RESULTS 24
Slide 25: Growth Drivers
GROWTH DRIVERS 2014 ANNUAL RESULTS 25
Slide 26: Growth Drivers
GROWTH DRIVERS DEVELOPMENT INNOVATION ONE GEOGRAPHIC TARGET: CONNECTED RETAIL: DYNAMIC METROPOLITAN AREAS ONE STEP AHEAD A MULTI-PRODUCTS ALTAFUTURE APPROACH = + + 2014 ANNUAL RESULTS 26
Slide 27: Development: A Geographic Target: Metropolitan Areas
DEVELOPMENT A GEOGRAPHIC TARGET: METROPOLITAN AREAS • Urbanization: a worldwide phenomenon that has grown more pronounced in France over the past 10 years • Dynamic regions faced with complex real estate challenges ANNUAL CHANGE IN POPULATION DENSITY A TREND TOWARDS CONCENTRATION BETWEEN 1982 AND 20
Slide 28: Development: The Metropolitan Areas' Partner
DEVELOPMENT THE METROPOLITAN AREAS’ PARTNER • Long-term strategic positions in France's leading metropolitan areas • Continued significant growth potential 68 MILLION FT² (6.3 MILLION M²) DEVELOPED OVER STRATEGIC TARGETS 10 YEARS IN METROPOLITAN AREAS (in millions of m² developed by the Group) Lille
Slide 29: Development: A Multi-Products Approach
DEVELOPMENT A MULTI-PRODUCTS APPROACH • The sole Group capable of operating: − in all asset categories − with a large variety of intervention possible PROJECT PORTFOLIO INTERVENTIONS Investor (4) (alone or in partnership) Shopping Neighborhood centers Shops Residential Offices TOTAL Property develop
Slide 30: Development: Project and Portfolio Concentration
DEVELOPMENT PROJECT AND PORTFOLIO CONCENTRATION • Dynamic metropolitan areas account for: − 91% of Group projects (1) − 91% of retail assets portfolio (2) STRONG PRESENCE IN LEADING FRENCH METROPOLITAN AREAS Other metropolitan areas (6) TOTAL No. of projects 45 13 7 10 2 1 12 90 and units (3) 8,800
Slide 31: Innovation
INNOVATION • One step ahead in connected retail • An undergoing transformation impacting all Group businesses SHOPPING CENTERS: RUE DU COMMERCE AFTEREFFECTS TO COME A REVOLUTION IN PROGRESS A strategic investment The Digital Factory Innovation The marketplace: the link between brick-and- mortar and
Slide 32: Innovation: Multi-Channel B2C: The Digital Factory
INNOVATION MULTI-CHANNEL B2C : THE DIGITAL FACTORY • The Digital Factory: a Data Management Platform which enables the collection and the real-time treatment of online and brick-and-mortar clients data • A technology designed by both Altarea Commerce and Rue du Commerce teams • Qwartz: 1st deploymen
Slide 33: Innovation: Knowledge of Customers' Paths and Behaviours
INNOVATION THE KNOWLEDGE OF CUSTOMERS PATHS AND BEHAVIOURS (1) SHOPPER’S PATH USE OF PAYMENT TERMINAL USE OF MOBILE APP (FIDELITY CREDIT CARD) > Geotargeting > Geonotification FIDELITY REGISTRATION 09/19/14 09/19/14 - €35 - Vap'n'Co MR. R’S PATH 09/25/14 - €26 - Vap'n'Co 09/25/14 - €8.5 - Vap'n'Co E
Slide 34: Innovation: Tangible Applications
INNOVATION TANGIBLE APPLICATIONS ACT Customer’s path, conversion rate, off-peak period, less visited areas… INTERACT Commercialy with our clients MARKET To retailers our enhanced knowledge of the catchment area GIVE VOICE To our clients MANAGE OUR Thanks to the profound knowledge of customers’ path
Slide 35: Innovation: Multichannel B2B: Ramp-up of the Marketplace
INNOVATION MULTICHANNEL B2B: RAMP-UP OF THE MARKETPLACE • Rue du Commerce changes our vision of retail • A strategic investment • Creation of a multichannel purchase experience 3rd MARKETPLACE IN FRANCE OUR AMBITION Business volume in €million 5 million unique visitors per month Attract brick-an
Slide 36: 2015 Objectives
2015 OBJECTIVES RETAIL REIT Step up development of premium assets E-COMMERCE / Deployment of the Digital Factory DIGITAL FACTORY RESIDENTIAL Targeted gains in market share: going from 5% to 6% of the national market OFFICE PROPERTY Targeted positions on major projects 2014 ANNUAL RESULTS 36
Slide 37: 2015 Outlook
2015 OUTLOOK Return to growth for FFO and dividend per share 2014 ANNUAL RESULTS 37
Slide 38: Appendices
APPENDICES 2014 ANNUAL RESULTS 38
Slide 39: Greater Paris: A Region at the Heart of the Group's Strategy
GREATER PARIS A REGION AT THE HEART OF THE GROUP’S STRATEGY • No. 1 economic and demographic hub in France: + 937,000 inhabitants over 10 years (1) • 15 assets in the portfolio KEY POSITIONS IN THE MOST DYNAMIC AREAS ONGOING PROJECTS Surface area Value (3) 215,900 m² NEUILLY 506,000 m² BOULEVARD MCD
Slide 40: Greater Lyon: A Historic Stronghold
GREATER LYON A HISTORIC STRONGHOLD • France's 2nd largest economic and demographic hub with 2.2 million inhabitants (1) • 1 asset in the portfolio STRONG PRESENCE BOTH IN UP-AND-COMING AREAS AND ONGOING PROJECTS LONG-ESTABLISHED RESIDENTIAL NEIGHBORHOODS Surface area Value (2) 8,900 m² 88,000 m² CAR
Slide 41: Nice Metropolitan Area: Cap 3000: A Driving Force
NICE METROPOLITAN AREA CAP 3000: A DRIVING FORCE • A major regional capital with 1 million inhabitants, crossroads between the Italian border and the Mediterranean Basin • 2 assets in the portfolio ACTIVE ON ALL MAJOR TERRITORIAL DEVELOPMENT ISSUES ONGOING PROJECTS Surface area Value (1) 37,100 m² 1
Slide 42: Greater Strasbourg: Recent Acceleration
GREATER STRASBOURG RECENT ACCELERATION • Unique location: European institutions, strong purchasing power, on the German border • Breakthrough for the Group in all businesses, creation of Cogedim Est and victory in the Wacken Competition • 2 assets in the portfolio STRENGTHENED PRESENCE IN INFLUENTIA
Slide 43: Marseille/Provence Metropolitan Area
MARSEILLE/PROVENCE METROPOLITAN AREA AN EVOLVING METROPOLITAN AREA • A 1 million inhabitants booming metropolitan area combining a dynamic economy, quality of life and exceptional natural heritage • 3 assets in the portfolio DEVELOPPEMENT OF MAJOR PROJECTS ONGOING PROJECTS Surface area Value (1) 46,
Slide 44: Toulouse Metropolitan Area
TOULOUSE METROPOLITAN AREA THE AERONAUTICS METROPOLITAN AREA • Strong dynamism of the region driven by the aeronautics industry • 1 asset in the portfolio STRENGTHENED PIPELINE WITH THE GAIN OF SAFRAN IN 2014 ONGOING PROJECTS Surface aera Value (1) 12,000 m² 59,000 m² SAFRAN 25,000 m² TOULOUSE GRAMO
Slide 45: Bordeaux Metropolitan Area
BORDEAUX METROPOLITAN AREA AN EMERGING METROPOLITAN AREA • Metropolitan area benefitting from sound fundamentals: demographic growth, a lower unemployment rate than national average, important student population, etc. NUMEROUS RESIDENTIAL PROJECTS ONGOING PROJECTS Surface area Value (1) INFLUENCE 1,
Slide 46: Detailed Income Statement
DETAILED INCOME STATEMENT 12/31/2014 12/31/2013 Change in value, Change in value, Funds from operations estimated expenses Funds from € millions TOTAL estimated expenses TOTAL (FFO) and transaction operations (FFO) and transaction costs costs Brick-and-mortar retail 188.7 (4)% 3.5 192.2 196.1 196.1
Slide 47: Detailed Balance Sheet (1/2)
DETAILED BALANCE SHEET (1/2) € millions 12/31/2014 12/31/2013 NON-CURRENT ASSETS 3,940.6 3,600.7 Intangible assets 244.7 237.7 o/w Goodwill 128.7 128.7 o/w Brands 96.8 98.6 o/w Other intangible assets 19.2 10.4 Property, plant and equipment 10.6 12.6 Investment properties 3,163.6 3,029.0 o/w investm
Slide 48: Detailed Balance Sheet (2/2)
DETAILED BALANCE SHEET (2/2) € millions 12/31/2014 12/31/2013 EQUITY 2,169.2 1,832.9 Equity attributable to Altarea SCA shareholders 1 249.5 1 151.3 Share capital 191.2 177.1 Other paid-in capital 518.7 437.0 Reserves 425.2 391.0 Income associated with Altarea SCA shareholders 114.3 146.2 Equity att
Slide 49: Net Asset Value
NET ASSET VALUE GROUP NAV 12/31/2014 12/31/2013 Change/sh € millions Change €/share are € millions €/share Consolidated equity, Group share 1,249.5 1,151.3 99.3 Other unrealized capital gains 276.8 317.6 Restatement of financial instruments 87.8 71.5 Deferred tax on the balance sheet for non-SIIC as