Colonial Sfl Socimi Sa · BME:COL

Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — FY2022 Earnings Presentation

63 slides from Colonial Sfl Socimi Sa's earnings presentation, Feb 28, 2023

  1. Slide 1: Full Year Results 2022

    Annual Results 2022 28th February 2023 Full Year Results 2022

  2. Slide 2: Disclaimer

    Disclaimer By attending this presentation and receiving this document, you are agreeing to be bound by the following limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws and/or may result in civil, administrative or criminal liabilities.

  3. Slide 3: Agenda

    Agenda 01 Highlights 02_ Financials – Strong Cash Flow & Resilient Values 03 Operations – Outperformance of Prime Product 04 High Visibility on Future Growth 05 Conclusion 3

  4. Slide 4: Presenting management team

    Presenting management team PRESENTING MANAGEMENT TEAM Pere Viñolas Carmina Ganyet Carlos Krohmer Chief Executive Officer Chief Corporate Officer Chief Corporate Development Officer 4

  5. Slide 5: Delivery of profitable growth on the back of polarization

    01 Highlights Delivery of profitable Growth on the back of polarization

  6. Slide 6: Highlights

    01 Highlights The Best Office Product delivering outperformance Strong Cash Flow Recurring Net Profit Recurring EPS EBITDA Revenues €161m €Cts 29.8/sh €283m €354m +26% +21% +14% +13% +7% LFL Resilient Values Gross Asset Value Disposals NTA per share NDV per share2 €13bn €0.5bn €11.83/sh €12.72/sh +1

  7. Slide 7: The Best Office Product delivering outperformance

    01 Highlights The Best Office Product delivering outperformance Letting Volume Second Highest #2 in Group’s History 177,000 sqm 96% 99.8% High Occupancy Group Paris Indexation Impact +5% +7% Group Madrid & - Annualized GRI uplift- Barcelona +6% ERV Office Growth +5% Paris Group Offices +6% +8% Relea

  8. Slide 8: The Best Office Product delivering outperformance

    01 Highlights The Best Office Product delivering outperformance 1. 1 Colonial delivers strong cash flow growth with full pricing power Strong Cash Flow Growth Pricing Power & Project Delivery 2. 2 Colonial achieves one of the highest GRI like for like growth rates in the sector 3 3. Inflation hedge:

  9. Slide 9: Financials – Strong Cash Flow & Resilient Values

    02 Financials – Strong Cash Flow & Resilient Values The full benefit of polarization

  10. Slide 10: Prime Strategy delivers double-digit profit growth with resilient valuations

    02 Financials – Strong Cash Flow & Resilient Values Colonial’s Prime Strategy delivers double-digit profit growth with resilient valuations STRONG CASH FLOW… EBITDA RECURRING NET PROFIT EARNINGS PER SHARE (EPS) €m €m €cts/share Beating upper range of guidance 283 +14% 29.8 +21% 249 161 +26% 24.6 128

  11. Slide 11: The Recurring Profit increases +26%

    02 Financials – Strong Cash Flow & Resilient Values The Recurring Profit increases +26% fully driven by strong increases in revenues The recurring EPS increases by +21%, beating the upper range of the guidance and Bloomberg consensus RECURRING PROFIT - €m EPS recurring €cts/share +26% 29.8 +21% (1.1

  12. Slide 12: Gross Rental Income increases by +13%

    02 Financials – Strong Cash Flow & Resilient Values Gross Rental Income increases by +13% 1. Income in the comparable Portfolio increases by +7% driven by indexation, rental growth and letting of new spaces 2. The Project Pipeline and Renovation program contribute with +7% growth on revenues 3. The

  13. Slide 13: +7.2% like for like Gross Rental Income growth

    02 Financials – Strong Cash Flow & Resilient Values Colonial delivers a +7.2% like for like Gross Rental Income growth proving its leadership in the sector 1. Colonial has delivered in 2022 one of the highest like for like growth rates in the sector 2. The 2022 like for like growth is the highest co

  14. Slide 14: Gross Rental Income increases are very strong in every segment

    02 Financials – Strong Cash Flow & Resilient Values Gross Rental Income increases are very strong in every segment 1. The Gross Rental Income increases by +13% driven by the Paris portfolio with an +17% growth 2. The outstanding like for like growth of +7% highlights the outperformance of Colonial’s

  15. Slide 15: Divesting more than €500m in line with appraisal values

    02 Financials – Strong Cash Flow & Resilient Values Colonial is being successful in divesting more than €500m in line with appraisal values 1. In a narrow investment market Colonial is successfully divesting a large volume of non-core assets (€500m) 2. Divestments achieved at attractive pricing leve

  16. Slide 16: Prime Factory Approach delivers value creation through project deliveries

    02 Financials – Strong Cash Flow & Resilient Values Colonial’s Prima Factory Approach delivers Strong Value creation through project deliveries The projects Biome & Velazquez have been delivered with substantial value creation STRONG VALUE CREATION THROUGH PROJECT DELIVERIES Biome – Paris 15 eme Vel

  17. Slide 17: Prime Strategy delivers resilient asset values

    02 Financials – Strong Cash Flow & Resilient Values Colonial’s Prime Strategy delivers resilient asset values in volatile market environments 1. Higher cash flows due to indexation & rental growth together with project value creation have offset yield expansion 2. Strong value performance has been d

  18. Slide 18: Capital Structure further enhanced through disposal program

    02 Financials – Strong Cash Flow & Resilient Values Colonial’s Capital Structure is being further enhanced through the disposal program1 Colonial reaches a liquidity of more than €2.6bn after full completion of the disposal program 1 ENHANCED LIQUIDITY POST DISPOSAL PROGRAM1 Disposal Program1 Enhanc

  19. Slide 19: Financial Cost under control with 100% of debt at fixed rate

    02 Financials – Strong Cash Flow & Resilient Values Colonial’s Financial Cost is under control with 100% of debt at fixed rate 1. Colonial has 100% of the debt at fixed cost maintaining financial costs under control at 1.7% 2. Colonial has as strong liquidity profile of €2.6bn covering more 3.7x the

  20. Slide 20: Resilient NTA and double-digit growth in NDV

    02 Financials – Strong Cash Flow & Resilient Values Colonial’s Prime Strategy delivers a resilient NTA and double-digit growth in NDV 1. Higher cash flows due to indexation & rental growth together with project value creation have offset yield expansion 2. A positive impact of > €1bn in MTM of the d

  21. Slide 21: Operations – Outperformance of Prime Product

    03 Operations – Outperformance of Prime Product Superior pricing power on the back of prime positioning

  22. Slide 22: Office Markets show strong support for Prime CBD product

    03 Operations – Outperformance of Prime Product Office Markets show strong support for Prime CBD product Office markets have a scarce supply of Grade A product in CBD that is facing strong demand chasing for the best product Rental market – Recovering Take-up facing scarce supply Investment Market C

  23. Slide 23: 2nd highest letting volume in its history

    03 Operations – Outperformance of Prime Product Colonial delivers the 2nd highest letting volume in its history Colonial has signed 177.000 sqm, a record level of activity at very attractive terms: locking in long contract maturities COMMERCIAL EFFORT – MAIN KPIS STRONG LETTING VOLUME – THE 2ND HIGH

  24. Slide 24: Prime Portfolio benefits from the polarization trend

    03 Operations – Outperformance of Prime Product Colonial’s Prime Portfolio clearly benefits from the polarization trend in the markets Colonial has captured market share in 2022 take-up and signs the highest rents setting the benchmark in prime PARIS – City Center MADRID Max. Signed Max. Signed >1,0

  25. Slide 25: The Colonial Portfolio captures strong rental growth

    03 Operations – Outperformance of Prime Product The Colonial Portfolio captures strong rental growth 1. Colonial has captured in 2022 again a strong rental growth due to its best in class office prime CBD products 2. All the portfolio segments have captured significant rental growth, being the Paris

  26. Slide 26: One of the highest occupancy ratios in the sector

    03 Operations – Outperformance of Prime Product Colonial has one of the highest occupancy ratios in the sector thank to its prime positioning 1. Colonials Group occupancy stands at very high 96% due to strong letting performance 2. The Paris portfolio hast the strongest occupancy profile being fully

  27. Slide 27: Healthy level of 4.4% availability of top-quality product

    03 Operations – Outperformance of Prime Product Colonial has a healthy level of 4.4% availability of top-quality product 1. The current availability corresponds mainly to recently delivered renovation programs 2. A very important part of the 12/22 availability has already been fully pre-let at the s

  28. Slide 28: Clear ambition & leadership on decarbonization & ESG

    03 Operations – Outperformance of Prime Product Colonial has a clear ambition & leadership on decarbonization & ESG Colonial’s ambition in decarbonization and ESG delivers strong performance on ESG ratings 2 0 2 2 CARBON DISCLOSURE GREEN BOND SBTI APPROVAL PROJECT GRESB MOODY’S FULL BOND CONVERSION

  29. Slide 29: Pricing Power & Alpha driving superior revenue growth

    04 High Visibility on Future Growth Pricing Power & Alpha driving superior revenue growth

  30. Slide 30: Prime Positioning has strong pricing power

    04 High Visibility on Future Growth 1 Colonial’s Prime Positioning has strong pricing power to capture sustained rental growth 1. Colonial has captured in 2022 for another year in a row very high market rental growth rates in all of its segments 2. Colonial’s prime product is setting the benchmark i

  31. Slide 31: Prime Positioning captures additional cash flows from indexation

    04 High Visibility on Future Growth 1 Colonial’s Prime Positioning allows to fully capture additional cash flows from indexation 1. Colonial has captured 5% of revenue growth trough indexation securing additional revenues for 2023 P/L 2. Released indexation references for contracts in Q1 2023 will f

  32. Slide 32: Prime Factory Approach: renovation program

    04 High Visibility on Future Growth 1 Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation 1. Colonial is completing its renovation program with €46m of additional rental revenues 2. A significant amount of YTD secured revenues have not yet crystalized in 2022 P/L and wil

  33. Slide 33: Renovation program new signings

    04 High Visibility on Future Growth 1 Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation The completion of the current renovation program gives a high visibility on additional growth in rental revenues RENOVATION PROGRAM New Signings 4Q 22 – YTD23 Washington Plaza 103 G

  34. Slide 34: Project pipeline delivery and secured rents

    04 High Visibility on Future Growth 1 Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation 1. Colonial is successfully delivering the project pipeline with one of the highest yield on costs in the sector 2. The Project Pipeline has a high level of secured rents YTD that w

  35. Slide 35: Project pipeline status

    04 High Visibility on Future Growth 1 Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation The high levels of pre-lets and project delivery status give strong visibility on additional future rents & capital value creation PROJECT PIPELINE Diagonal 525 Marceau / Iena 96 Ve

  36. Slide 36: Rives de Seine, Paris

    04 High Visibility on Future Growth 1 Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation Colonial actively sources new opportunities of Prime Factory for additional Cash Flow & Value Creation RIVES DE SEINE | Paris City Center (12eme Arrond.) Creating a new reference in

  37. Slide 37: High visibility on further rental growth

    04 High Visibility on Future Growth 1 Colonial’s Portfolio offers a high visibility on further rental growth 1. Colonial’s Prime Portfolio has a proven track record on capturing reversion in rental revenues 2. Colonial’s portfolio will capture additional rents through reversion in the contract portf

  38. Slide 38: Cash flow protection through proactive financial management

    04 High Visibility on Future Growth 2 Cash Flow protection & Value creation through proactive financial management 1. Colonial has 100% of its current debt at fixed cost maintaining financial costs under control 2. The strong hedging profile of the debt delivered more than €1bn of MTM value creation

  39. Slide 39: Divesting more than €500m in line with appraisal values

    04 High Visibility on Future Growth 3 Colonial is successful in divesting more than €500m in line with appraisal values 1. In a narrow investment market Colonial is successfully divesting a large volume of non-core assets (€500m) 2. Colonial’s assets reach attractive pricing levels, in line with app

  40. Slide 40: Track record on value creation through capital recycling

    04 High Visibility on Future Growth 3 Colonial has a strong track record on value creation through capital recycling Colonial continues with its successful flight to quality strategy through active portfolio asset allocation ONGOING FLIGHT TO QUALITY THROUGH ACTIVE CAPITAL ALLOCATION 2015 Alpha I Al

  41. Slide 41: Strong cash flow growth and outperformance on valuations

    04 High Visibility on Future Growth 4 Colonial’s Prime Strategy delivers strong cash flow growth and outperformance on valuations 1. Colonial’s NTA is resilient – Cash Flow Growth offsets yield expansion 2. Colonials fundamental value is confirmed by market evidence – Disposals in line with NTA Inde

  42. Slide 42: Superior growth & returns through prime positioning

    05 Conclusion Superior growth & returns through prime positioning

  43. Slide 43: Colonial well positioned

    05 Conclusion Colonial well positioned STRONG CASH FLOWS & RESILIENT VALUES 1 1. Colonial delivers strong cash flow growth with full pricing power 2 2. Inflation hedge: the cash flow growth of Colonial offsets the impact of yield expansion 3. 3 We deliver Alpha Value Creation through our projects 4

  44. Slide 44: Appendices / Q&A

    Appendices Q&A

  45. Slide 45: Solid profitability with enhanced quality

    APPENDICES Solid profitability with enhanced quality PROFIT & LOSS ACCOUNT Profit & Loss Account REVENUE - GROSS RENTAL INCOME GROUP RECURRING EBITDA €m €m Results analysis - €m 2022 2021 +13% +14% 283 Gross Rents 354 314 354 314 249 Recurring EBITDA 283 249 Recurring financial result (81) (80) Inco

  46. Slide 46: Net Rental Income growth of +11%

    APPENDICES Net Rental Income growth of +11% (+7% like for like) Net Rental Income variance NRI Variance YoY Net Rental Net Rental Income Income LFL 326 +11% +11% +7% 293 GROUP +7%1 LFL PARIS +15% +7% 12/21 12/22 Diagonal 609 MADRID +5% +7% Washington Plaza +7% +9% BARCELONA NRI= Net Rental Income 1

  47. Slide 47: +1% GAV LFL growth YoY

    APPENDICES +1% GAV LFL growth YoY GAV Full Year 2022 GROWTH GAV VARIANCE LFL €m Full Year 2022 2H 22 1H 22 +1% LFL GROUP LFL +1% (2%) +4% +5% 412 13,005 17 PARIS +2% (1%) +4% 178 (38) 12,436 MADRID +1% (4%) +5% BARCELONA (2%) (4%) +1% 12/2021 Paris Madrid Barcelona Net 12/2022 Investments 47

  48. Slide 48: Solid Capital Structure with strong Hedging Profile

    APPENDICES Solid Capital Structure with strong Hedging Profile Proactive hedging strategy… … Strong protection from interest rates increases Interest rate pre-hedges covering €2.4bn of future bonds maturity formalized in 11/21 pre interest rate increase Market rates Colonial Spot Cost of Debt (inc.

  49. Slide 49: A solid capital structure

    APPENDICES A solid capital structure Extension of Debt Maturities A Solid Financial Structure Maturity profile of debt facilities - €m 31/12/2021 31/12/2022 31/12/2022 aaaa aaaa Post disposals €4,716m €5,355m €4,934m Net Debt 35.8% 38.7% 36.9% LTV Green Bonds Spain Green Bonds France ECPs Rest of de

  50. Slide 50: Benefitting from polarization - Setting the benchmark in Prime

    APPENDICES Benefitting from polarization - Setting the benchmark in Prime PARIS MADRID BARCELONA Max. Signed Max. Signed Max. Signed >1,000 40 28 €/sqm/y €/sqm/m €/sqm/m Place de l’Étoile Place de la Concorde Musée du Tour Louvre Eiffel Plaza de Colón Letting volume - sqm Letting volume - sqm Lettin

  51. Slide 51: Superior performance on high-quality prime product

    APPENDICES Superior performance on the back of high-quality prime product LETTING VOLUME (Sqm) KPIS 2022 2021 2022 RELEASE SPREAD1 ERV GROWTH2 MATURITY (years) EPRA VACANCY3 1st potential exit Expiry TOTAL 170,345 176,895 +6% +5% 5.9 9.2 4.4% PARIS 56,472 43,803 +6% +5% 7.7 10.5 0.2% MADRID 76,779 9

  52. Slide 52: Vacancy at very healthy levels in every segment

    APPENDICES Vacancy at very healthy levels in every segment EPRA1 VACANCY PARIS 2% 0.3% 0.2% 0.2% 12/21 6/22 9/22 12/22 Total 7% 4% 4% 4% 4% Vacancy(2) TOTAL 7% MADRID 5% 4.5% Ortega y Gasset & Velazquez 86D 1% TOTAL 12/21 6/22 9/22 12/22 4% 4% 4% 4% Entries in operation Renovation Program 20% 1.6% 1

  53. Slide 53: Rental growth remains solid

    APPENDICES Rental growth remains solid SOLID INCREASE IN RENTAL PRICES GROWTH ON SIGNED RENTS1 RELEASE SPREAD2 TOTAL TOTAL 2021 1Q 22 2Q 22 3Q 22 4Q 22 2022 2021 1Q 22 2Q 22 3Q 22 4Q 22 2022 TOTAL +5% +4% +6% +4% +4% +5% +7% +9% +6% +3% +2% +6% PARIS +8% +4% +6% +4% +3% +5% +2% +6% +9% n.a. n.a. +6%

  54. Slide 54: AAA Clients with strong solvency

    APPENDICES AAA Clients with strong solvency 2023 MATURITIES – MIX 2023 MATURITIES BREAKDOWN % on annualized Group GRI Madrid 46% 17.5% 1.5% 10.9% 5.0% 1.6% 71 6 44 Paris Barcelona 39% 16% Paris Madrid 20 Barcelona 6 Group Signed & Not Stays & Under Remaining 2023 Impact Executed BO Negotiation Rent

  55. Slide 55: Project pipeline with immediate impact in P&L

    APPENDICES Alpha – Prime factory – Project pipeline with immediate impact in P&L PROJECT PIPELINE ALMOST DELIVERED… …SIGNIFICANT FUTURE CASH FLOW SECURED > 7/8 assets almost fully pre –let > €55m of Gross Rents secured (67% of €82m – full potential) > Yield on Cost Confirmed: 5/8 projects delivered

  56. Slide 56: Project pipeline – GRI reversionary potential

    APPENDICES Project pipeline – GRI reversionary potential going forward PROJECT PIPELINE ALMOST DELIVERED 1 GLA Total Yield Project City % Group Delivery (sqm) Cost €m on Cost GRI2 Path to reversion - €m 1 Diagonal 525 Barcelona CBD 100% Delivered 5,706 41 ≈ 5% 27 82 2 83 Marceau Paris CBD 98% Delive

  57. Slide 57: Project pipeline – significant value creation potential

    APPENDICES Project pipeline – significant value creation potential going forward PROJECT PIPELINE ALMOST DELIVERED 1 GLA Total Yield Project City % Group Delivery (sqm) Cost €m on Cost Value creation potential - €bn 1 Diagonal 525 Barcelona CBD 100% Delivered 5,706 41 ≈ 5% 2 83 Marceau Paris CBD 98%

  58. Slide 58: Renovation program with immediate impact in P&L

    APPENDICES Alpha – Prime factory – Renovation program with immediate impact in P&L RENOVATION PROGRAM ALMOST COMPLETED… …SIGNIFICANT FUTURE CASH FLOW SECURED > 8 out of 9 projects delivered > €39m of Gross Rents secured (84% of €46m – full potential) > 7 out of 8 delivered assets are almost fully le

  59. Slide 59: Investment markets for prime product remain active – Paris

    APPENDICES Investment markets for prime product remain active Asset Area Price GLA Cap. Value 150, Champs-Élysées CBD €600m 18,000 sqm €33,333/sqm (3Q 2022) 2 Place Rio CBD €282m 8,676 sqm €32,570/sqm (2Q 2022) Portefeuille Dray CBD €900m 27,900 sqm €32,260/sqm (3Q 2022) PARIS SKY CBD €108m 3,500 sq

  60. Slide 60: Investment markets for prime product remain active – Madrid

    APPENDICES Investment markets for prime product remain active Asset Area Price GLA Cap. Value Castellana 51 CBD €239m 18,700 sqm €12,754/sqm (4Q 2022) Goya 36 CBD €52m 4,500 sqm €11,556/sqm (1Q 2022) MADRID Fray Luis de León 13 CBD €32m 4,300 sqm €7,441/sqm (4Q 2022) Ancora 40 CBD €51m 7,215 sqm €7,

  61. Slide 61: Investment markets for prime product remain active – Barcelona

    APPENDICES Investment markets for prime product remain active Asset Area Price GLA Cap. Value Portal de l’Àngel 40* City Center €105m 4,400 sqm €23,863/sqm (4Q 2022) * Includes Office & Retail Units Diagonal 662** CBD €240m 27,300 sqm €8,791/sqm Transaction not completed **Sale price as of publishin

  62. Slide 62: ESG performance

    APPENDICES ESG performance ESG topics analyzed Score Colonial Overview > CO2 reduction in line with 1.5º Ambition > Decarbonization Plan scientifically approved 1.5Cº pathway Targets approved > Leading the way by setting science-based targets > Highly-ambitious plan towards achieving 1.5ºC goal > CO

  63. Slide 63: www.inmocolonial.com

    www.inmocolonial.com © Colonial

Inmobiliaria Colonial, SOCIMI — FY2022 Earnings Presentation on 6ix