Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — FY2020 Earnings Presentation
40 slides from Grand City Properties Sa's earnings presentation, March 2021
Slide 1: Financial Results Presentation FY 2020
FINANCIAL RESULTS PRESENTATION FY 2020 MARCH 2021
Slide 2: Contents
CONTENTS BERLIN COLOGNE DRESDEN LONDON HIGHLIGHTS OPERATIONAL & FINANCIAL PORTFOLIO UPDATE CONSERVATIVE FINANCIAL PERFORMANCE PLATFORM MÖNCHENGLADBACH BREMEN ESG GUIDANCE 2
Slide 3: Highlights
01 HIGHLIGHTS 3
Slide 4: FY 2020 Results: Solid business efficiencies driving robust operational profitability
FY 2020 RESULTS SOLID BUSINESS EFFICIENCIES DRIVING ROBUST OPERATIONAL PROFITABILITY Revenue Net rental income 1.8% LIKE-FOR-LIKE €535 million €372 million Rental growth -4% -3% RESILIENT PORTFOLIO, PROVEN IN THE PANDEMIC STRESS CASE Net profit Net profit -9% FFO I before perpetual notes €449 millio
Slide 5: Enhancing Business Profitability
ENHANCING BUSINESS PROFITABILITY FINANCIAL PLATFORM OPTIMIZATION ACCRETIVE CAPITAL RECYCLING ACTIVE FINANCIAL MANAGEMENT REDUCING COST OF DEBT AND FURTHER OPTIMIZING FINANCIAL PLATFORM CREATING HIGHER FFO PROFITABILITY COST OF DEBT: 1% PERPETUAL NOTES >1,400 units at an average multiple of IMPROVED
Slide 6: Operational Profitability
OPERATIONAL PROFITABILITY Selected consolidated statement of profit or loss 1-12/2020 1-12/2019 NET RENTAL INCOME (IN € MILLIONS) ADJUSTED EBITDA (IN € MILLIONS) in € ‘000 unless otherwise indicated Revenue 535,424 560,303 Net rental income 372,462 382,605 383 372 Operating and other income 162,962
Slide 7: FFO I
FFO I FFO I (IN € MILLIONS) in € ‘000 unless otherwise indicated 1-12/2020 1-12/2019 Adjusted EBITDA 299,780 297,662 Finance expenses (52,760) (45,041) 212 215 198 Current tax expenses (31,387) (37,062) 179 182 168 Contribution from / (to) joint ventures and minorities, Net (579) (3,593) FFO I befor
Slide 8: FFO II
FFO II in € ‘000 unless otherwise indicated 1-12/2020 1-12/2019 FFO I (previously defined as FFO I after perpetual notes attribution) 182,206 178,966 1 Result from disposal of properties 301,828 169,421 FFO II 2 484,034 348,387 Crystalizing gains through value accretive disposals of non- 1 the exces
Slide 9: New EPRA Net Asset Value Metrics
NEW EPRA NET ASSET VALUE METRICS EPRA NAV METRICS (IN € MILLIONS) EPRA NRV → assumes that entities never sell assets and aims to represent the value EPRA NRV EPRA NTA EPRA NDV required to rebuild the entity +4% +5% - Deferred tax liabilities fully added back 4,776 4,571 4,566 - RETT fully added back
Slide 10: Portfolio Update
03 PORTFOLIO UPDATE 10
Slide 11: Investment Property – Enhanced Portfolio Quality
INVESTMENT PROPERTY – ENHANCED PORTFOLIO QUALITY INVESTMENT PROPERTY (IN € MILLIONS) VALUATION PARAMETERS ACQUISITION CRITERIA 2020 2019 Acquisition in densely populated areas and major cities Rent Multiple 22.2x 20.4x 7,972 8,022 High cash flow generating assets 7,244 Value per sqm €1,858 €1,543 Ma
Slide 12: Diversified Portfolio with High Growth Potential
DIVERSIFIED PORTFOLIO WITH HIGH GROWTH POTENTIAL 12
Slide 13: Focus on Central Locations in Berlin and NRW
FOCUS ON CENTRAL LOCATIONS IN BERLIN AND NRW BEST IN CLASS BERLIN PORTFOLIO 26% WELL DISTRIBUTED NRW PORTFOLIO 17%* of GCP’s of GCP’s Portfolio Portfolio Value 16% of GCP’s Portfolio Rent 70% of the Berlin portfolio is located in top tier neighborhoods: Charlottenburg, Wilmersdorf, Mitte, Kreuzberg,
Slide 14: Strategically Located in Dynamic Eastern and Northern German Cities
STRATEGICALLY LOCATED IN DYNAMIC EASTERN AND NORTHERN GERMAN CITIES QUALITY EAST PORTFOLIO QUALITY NORTH PORTFOLIO DRESDEN/LEIPZIG/HALLE 13%* HAMBURG / BREMEN 5%* of GCP’s of GCP’s Portfolio Portfolio DIVERSIFICATION INTO WELL POSITIONED IN GERMANY’S DYNAMIC EASTERN GERMANY’S LARGEST CITIES WITH STR
Slide 15: High Quality London Portfolio with Regulatory Diversification
HIGH QUALITY LONDON PORTFOLIO WITH REGULATORY DIVERSIFICATION 19%* of GCP’s Approx. 85% of the portfolio Strong letting The total London Portfolio performance has taking portfolio, including is situated within a short walking distance to an double digit vacancy to pre-marketed units underground/over
Slide 16: Portfolio Potential
PORTFOLIO POTENTIAL CURRENT ANNUALIZED RENTAL INCOME vs. MARKET POTENTIAL 1 (INCLUDING VACANCY REDUCTION) Strong upside potential for rent increases to market levels with limited downside risk +7% +18% €25 mn € 425 mn € 400 mn 2 €60 mn Only 3% of units subject to rent restrictions from subsidization
Slide 17: Maintenance and Repositioning Capex
MAINTENANCE AND REPOSITIONING CAPEX REPOSITIONING CAPEX REPOSITIONING CAPEX AND - Focus remains on improving the asset quality MAINTENANCE - All capex is directed towards value creation (in € per avg. sqm) - Other value-add measures include: 21.2 - Upgrading apartments for new rentals 19.7 - Enhanci
Slide 18: Conservative Financial Platform
04 CONSERVATIVE FINANCIAL PLATFORM 18
Slide 19: Financial Policy
FINANCIAL POLICY GCP FINANCIAL POLICY THE STRAIGHT BONDS AND THE CONVERTIBLE BOND ARE UNSECURED AND HAVE THE BELOW COVENANT PACKAGE: Strive to achieve A- global rating in the long term Overview of Covenant Package Covenant Type GCP Covenant limit and FY 2020 results LTV limit at 45% Limitation on De
Slide 20: Low Leverage
LOW LEVERAGE LOAN-TO-VALUE DEBT PROFILE OPTIMIZATION MEASURES Prepaid high interest bearing, near-term bank loans while drawing down in € ‘000 unless otherwise indicated Dec 2020 Dec 2019 additional bank financing at low interest rates for terms of up to 20 years Investment property1) 7,954,448 7,90
Slide 21: Capital Structure
CAPITAL STRUCTURE COST OF DEBT AVERAGE DEBT MATURITY 4% 5% 6% Bank Debt 3% (Current) 36% Straight Bond 7 years 34% 1% 3% 3% Convertible 57% 57% fixed & swapped Equity 92% with no significant maturities capped Marginal cost of debt: Perpetuals COD as of Dec 2020: 1.3% in the following years variable
Slide 22: Debt Coverage & Credit Rating
DEBT COVERAGE & CREDIT RATING DEBT AND INTEREST COVER RATIO UNENCUMBERED ASSETS LIQUIDITY POSITION FY 2020 5.7x 4.6x €6.7 bn Approx. €1.7 billion 82% of value ICR* DSCR** LARGE POOL OF UNENCUMBERED ASSETS CORPORATE CREDIT RATING A-/A3 S&P Moody’s BBB+ Baa1 GCP was the first Baa2 BBB German RE compan
Slide 23: ESG
05 ESG 23
Slide 24: Sustainability and ESG
SUSTAINABILITY AND ESG ❑ 75th percentile within real estate peer group in Corporate Sustainability Assessment ❑ One of the leading sustainability ratings, which inclusion in Dow Jones Sustainability Index is based on ❑ Industry best in sub-category Customer Relationship Management ❑ 97th percentile
Slide 25: ESG Goals
ESG GOALS FOCUS AREAS Employees Environment Governance Vin, GCP’S TARGETS GRAND CITY
Slide 26: Environment
ENVIRONMENT ❑ GCP enhanced its ESG reporting with an additional summary report - “Sustainability: In Focus” in English and German providing stakeholders a quick overview of all the sustainability measures taken by the Company. ❑ Introduced a sustainability management software WeSustain in 2020 to im
Slide 27: Social
SOCIAL TENANTS GCP FOUNDATION EMPLOYEES In 2020, alternative activities for our More than 40 charitable projects tenants like virtual Santa event through our Foundation across Introduced subsidies for lunch and public transport LOOKING AHEAD Germany Our traditional tenant events at our properties wi
Slide 28: Governance
GOVERNANCE 1 BEST-IN-CLASS REPORTING LEADING TO HIGH STANDARDS OF TRANSPARENCY - For the FOURTH CONSECUTIVE year, GCP received the EPRA BPR and sBPR gold awards for its financial reporting and sustainability reporting, respectively. - GCP also published its remuneration report for 2019, further impr
Slide 29: Guidance
06 GUIDANCE 29
Slide 30: 2021 Guidance
2021 GUIDANCE 2020 2021 Actual Guidance FFO I* 182 183-192 FFO I* per share (in €) 1.07 1.08-1.13 Dividend per share (in €) 0.82 0.81-0.85 Total net rent like-for-like growth 1.8% 2%-3% LTV 31% <45% * previously defined as FFO I after perpetual notes attribution DESPITE €1 BN DISPOSALS IN 2020, STRO
Slide 31: Appendix
APPENDIX 31
Slide 32: Coronavirus – Agile & Adaptable
CORONAVIRUS – AGILE & 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 t
Slide 33: EPRA New KPIs
EPRA NEW KPIs In € ‘000 unless specified DECEMBER 2020 DECEMBER 2019 EPRA NRV EPRA NTA EPRA NDV EPRA NAV EPRA NNNAV EPRA NRV EPRA NTA EPRA NDV EPRA NAV EPRA NNNAV Equity attributable to the owners of the Company 3,713,849 3,713,849 3,713,849 3,713,849 3,713,849 3,492,632 3,492,632 3,492,632 3,492,63
Slide 34: Strong Capital Market Access
STRONG CAPITAL MARKET ACCESS Proven track record Approx. €9 billion of capital raised since 2012, with a proven track record in 4 different instruments: Equity, Perpetual notes, Convertible bonds and € 1,308 mn € 1,300 mn Straight bonds across a broad spectrum of investors & markets € 1,201 mn GCP’s
Slide 35: Analyst Coverage
ANALYST COVERAGE 32 28 28.0 27.5 27.0 26.2 24 25.5 25.2 25.0 25.0 25.0 24.8 24.8 24.5 24.5 24.0 23.0 22.5 20 21.0 20.0 20.0 19.5 16 12 8 4 0 Bank of America First Berlin Kepler Citigroup UBS Credit Suisse Commerzbank Berenberg Societe Generale DZ Bank Goldman Sachs J.P. Morgan Barclays Deutsche Bank
Slide 36: Share Development & Ownership Structure
SHARE DEVELOPMENT & OWNERSHIP STRUCTURE GCP - SHARE PRICE AND TOTAL RETURN SINCE FIRST EQUITY PLACEMENT (19.7.2012) Share price/conversion price throughout the Company’s issuances Frankfurt Stock Exchange (Prime *Refers to the conversion price of the convertible bonds issuance Placement **Effective
Slide 37: Management
MANAGEMENT Refael Zamir Mr. Zamir is the Chief Executive Officer and CFO of Grand City Properties. Mr. Zamir has worked for the Group starting from 2013 and has 15 years of international experience in management, capital Chief Executive Officer / markets, finance and accounting. Before Mr. Zamir bec
Slide 38: Management
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 financial advisory and was an economist. Mr
Slide 39: Business Risk Profile
CREDIT RATING MATRIX FINANCIAL RISK PROFILE 1 2 3 4 5 6 MINIMAL MODEST INTERMEDIATE SIGNIFICANT AGGRESSIVE HIGH LEVER-AGED 1 aaa/ GCP will continue strengthening its position within the business profile EXCELLENT aa a+/a a- bbb bbb-/bb+ BUSINESS RISK PROFILE aa+ (Vonovia- BBB+)* 2 (DW) (Aroundtown)
Slide 40: Contact
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