Investis Holding SA · SIX:IREN
Investis Holding SA — H1 2021 Earnings Presentation
47 slides from Investis Holding SA's earnings presentation, Sep 1, 2021
Slide 1: Half-Year Results 2021
HALF-YEAR RESULTS 2021 1 September 2021
Slide 2: Disclaimer
Disclaimer This communication contains specific forward-looking statements, beliefs or opinions, including statements with respect to objectives, which are based on current beliefs, expectations and projections about future events and assumptions of the management of Investis Holding SA ("Investis")
Slide 3: Agenda
Agenda Highlights of HY 2021 Market trends Financial overview HY 2021 Outlook Q&A Annexes HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 3
Slide 4: Highlights HY 2021: Another set of excellent results
Highlights HY 2021 Another set of excellent results Group ▪ Revenue up 14% to CHF 102m ▪ Operating profit before revaluation effect up 6.1% ▪ Operating profit of impressive CHF 155m (CHF 62m) ▪ Substantial increase in NAV per share to CHF 82.50 (CHF 69.41) excluding deferred taxes with regard to pro
Slide 5: Agenda: Market trends
Agenda Highlights of HY 2021 Market trends Financial overview HY 2021 Outlook Q&A Annexes HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 5
Slide 6: Real Estate Market in Geneva
Real Estate Market in Geneva Lake Geneva region remains an attractive location Migration/ Demography Construction activity Regulations Capital Markets ▪ Net migration into Switzerland ▪ Higher construction activity at ▪ Tax regime for corporations ▪ CHF interest rates expected constantly in positive
Slide 7: Despite stronger construction activity no significant change in demand
Real Estate Market in Geneva Despite stronger construction activity no significant change in demand in the residential market ▪ Most of the apartments that will come to the market will have controlled rents by the canton and will not change the dynamics in the free market ▪ Demand for apartments in
Slide 8: Lowest vacancy rate in key markets overall and in GE
Real Estate Market in Switzerland Lowest vacancy rate in key markets overall and in GE at 0.51% per June 2021 Evolution of the vacancy rate in canton GE 1) in % 1985 2000 2021 ▪ Number of construction applications is declining again. Strongest decline was recorded in the Cantons of Geneva, Basel-Sta
Slide 9: Lowest number of units for rent/stock in the Lake Geneva region
Real Estate Market in Switzerland Lowest number of units for rent/stock in the Lake Geneva region (number of units for rent/stock as of Q2 2021) Source: WüestPartner HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 9
Slide 10: Offered rents are >25% higher than rents in current leases
Real Estate Market in Switzerland Offered rents are >25% higher than rents in current leases in Geneva and Lausanne Offered rents «premium» vs leased rents 2020 Source: WüestPartner HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 10
Slide 11: Less rental reduction in Lake Geneva region
Real Estate Market in Switzerland Less rental reduction in Lake Geneva region where lease duration is higher than national average (due to significant «controlled rent» stock) Average rent reduction per year 2011-2020) Average duration of leases - 2020 >10 years 8 to 10 years 6 to 8 years <6 years n
Slide 12: Geneva's vacancy rate declining again and well below national trend
Real Estate Market in Switzerland Geneva’s vacancy rate declining again and well below national trend Switzerland Geneva 2.00 1.80 1.72 1.60 Vacany rate (in %) 1.40 1.20 1.00 0.80 0.60 0.49 0.40 0.20 0.00 Source: BFS, OCSTAT HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 12
Slide 13: Higher costs, lower disposable income feeds rental market
Real Estate Market in Switzerland Higher costs, lower disposable income feeds rental market – low share of house owners in markets with lowest vacancy rates in Switzerland RDI: Regional Disposable Income indicator (Swiss average = 0) RDI Indicator based on: • Tax burden • Housing costs • Commuting c
Slide 14: Real estate net yields remain well above 10-year bond
Real Estate Market in Switzerland Real Estate net yields remain well above 10-year bond despite further compression Residential prime net yield by city and Swiss 10-year bond yield Geneva Lausanne Zurich 10-y Bond 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% -0.50% -1.00% Source: WüestPartner, CB
Slide 15: Strategy: Buy and hold while improving efficiency of the building
Strategy: Buy and hold while improving efficiency of the building where appropriate Rue du Nant 30 – Geneva – Acquisition in December 1998 Appraisal value Rent in CHF m in CHF k 1998 Residential block built in 1986 with 40 residential units and 2 retail units 339 2014 Renovation of bathrooms and kit
Slide 16: Real Estate Market in Switzerland – to sum up
Real Estate Market in Switzerland – to sum up Investis is active in markets where there is a constant situation of undersupply in the residential market – Lake Geneva region is Investis’ USP and highly differentiates from its peers in the Swiss residential market ▪ Low vacancy rates ▪ Low interest r
Slide 17: Agenda: Financial overview HY 2021
Agenda Highlights of HY 2021 Market trends Financial overview HY 2021 Outlook Q&A Annexes HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 17
Slide 18: Remarkable operating results coupled with substantial revaluation effects
Remarkable operating results coupled with substantial revaluation effects Substantial increase in NAV ▪ Investis Group: − Revenue of CHF 102m (HY 2020: CHF 89m) – a 14% growth − Operating performance excl. revaluations up 6% to CHF 25.1m (CHF 23.6m) − Revaluation gains of CHF 131m − Net profit of CH
Slide 19: Investis Group: Overview on the financial performance HY 2021
Investis Group: Overview on the financial performance HY 2021 HY 2021 HY 2021 (CHFm) HY 2021 Δ in % HY 2020 FY 2020 FY 2019 Revenues Invested Capital Revenue 101.7 14.0 89.2 178.7 187.5 2% EBITDA 28% 25.1 6.1 23.6 45.5 46.7 before revaluations/disposals Income from revaluations / from 131.4 232.4 39
Slide 20: Properties: Significant increase in valuation underlines portfolio quality
Properties: Significant increase in valuation underlines the portfolio quality further EBIT enhanced by substantial revaluation gains to CHF 151m (CHFm) HY 2021 Δ in % HY 2020 FY 2020 FY 2019 ▪ Like-for-like rental growth +1.6% (31.12.2020: +1.6%) Revenue 29.2 +0.5 29.0 57.9 57.0 ▪ Lowered vacancy r
Slide 21: Properties: Further expanding portfolio
Properties: Further expanding portfolio -> adding value & rental growth -> buy and hold Property Portfolio: 170 buildings – 3,059 residential units – value CHF 1.67 bln by category: by canton: by apartment type 1) : 7% 13% 5% 1% 29% 25% 28% 69% 93% 30% Residential Commercial GE VD VS other 1-room 2-
Slide 22: Properties: favourable portfolio mix delivering like-for-like rental growth
Properties: favourable portfolio mix delivering like-for-like rental growth Still room for further rental growth Rent potential based on CBRE appraisal 75.0 (CHFm) 65.0 +13% +4.1% 55.0 57.9 57.0 55.0 45.0 (CHFm) 47.5 +1.0% 41.9 35.0 37.8 37.2 35.0 32.4 25.0 29.2 Current rent 40.8 rent 1) 41.9 Market
Slide 23: Real Estate Services: Initial consolidation of acquired companies
Real Estate Services: Initial consolidation of acquired companies as per 1 April Further improved EBIT margin (CHFm) HY 2021 Δ in % HY 2020 FY 2020 FY 2019 HY2021 Revenues Revenue 74.4 +19.9 62.1 124.6 136.0 EBIT 6.5 +20.7 5.4 10.8 11.5 40% EBIT margin 8.8% n/a 8.7% 8.6% 8.4% 60% ▪ CHF 12m revenue g
Slide 24: Real Estate Services: evolution over the years
Real Estate Services: evolution over the years Steady growth of top line and much improved profitability even e evol on EBIT margin evolution (in %) 10.0% 8.7 8.7% 8.8% 8.8 8.3 8.3% 8.0% 6.0% 5.0 5.0% 5.0 5.0% 4.0% 2.1 2.1% 2.0% 0.0% HY 2016 HY 2017 HY 2018 HY 2019 HY 2020 HY 2021 even e o dis osed
Slide 25: Investis Group: Remarkable Net profit
Investis Group: Remarkable Net profit EPS at CHF 10.39 (CHFm) HY 2021 Δ in % HY 2020 FY 2020 FY 2019 EBIT 154.6 +150.0 61.9 136.2 127.2 ▪ Financial income includes the effect of selling the minority stake in Flaxfox (CHF 2.6m) Financial income 2.7 +1'348.8 0.2 0.5 5.8 ▪ Tax rate unchanged below 15%
Slide 26: Solid capital structure and prudent financing policy
Solid capital structure and prudent financing policy Strong balance sheet Balance Sheet (CHFm) 30.06.2021 Δ in % 31.12.2020 31.12.2019 31.12.2018 Debt structure per 30.06.2021 Cash and cash equivalents 4 -74.9 15 66 33 Bonds CHF 535m Properties portfolio 1'668 +11.9 1'490 1'438 1'345 Credit lines av
Slide 27: Debt structure (interest-bearing)
Debt structure (interest-bearing) Strategy of a low LTV of around 40% unchanged since IPO 800 700 600 660 115 Maturity of financial liabilities as at 30.06.2021 (CHFm) 520 560 500 535 Due within the first year 115 100 215 400 420 300 (CHFm) Due within the second year 180 100 200 Due within the third
Slide 28: Agenda: Outlook
Agenda Highlights of HY 2021 Market trends Financial overview HY 2021 Outlook Q&A Annexes HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 28
Slide 29: Outlook 2021
Outlook 2021 Swiss housing sector remains a stable anchor for the real estate market ▪ Immigration into Switzerland and specially into the Lake Geneva region remains an important driver ▪ Maintain and further expand portfolio through targeted acquisitions ▪ Demand for residential properties in prime
Slide 30: What makes Investis unique?
What makes INVESTIS unique? ▪ Quality of the portfolio with well maintained properties ▪ Largest listed residential property owner in the undersupplied Lake Geneva region – sustaining demand, high return, low vacancies – continuous rent potential of 13% – low exposure in commercial properties lower
Slide 31: Agenda: Q&A
Agenda Highlights of HY 2021 Market trends Financial overview HY 2021 Outlook Q&A Annexes HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 31
Slide 32: Thank you for your attention!
Thank you for your attention! HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 32
Slide 33: Investis Group is a leading Swiss residential property company
Investis Group is a leading Swiss residential property company in the Lake Geneva region and a national Real Estate Services provider Strategy and investment policy ▪ Focus on residential properties in GE and VD ▪ Buy and hold ▪ Growth through realisation of rent potential ▪ Expansion of portfolio t
Slide 34: Fundamental business strengths – Value proposition
Fundamental business strengths Value proposition HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 34
Slide 35: Very focused and attractive portfolio around the Lake Geneva
Very focused and attractive portfolio around the Lake Geneva Strategy buy and hold – realise rent upside potential Focus is on: ▪ Residential − 93% Residential − 7% Commercial VD: 25% ▪ Lake Geneva region ▪ Middle segment (no luxury apartments) ▪ Low vacancy rates GE: 69% VS: 5% HALF-YEAR RESULTS 20
Slide 36: Real Estate Services: active nationwide with well-known local brands
Real Estate Services: active nationwide with well-known local brands Focus on two Activities and two national brands for PROPERTY MANAGEMENT FACILITY SERVICES ▪ Property management ▪ Caretaking services ▪ Co-ownership associations ▪ Cleaning services ▪ Center management ▪ Building technology ▪ Letti
Slide 37: Property Management – Privera
Property Management – P IVE A …. …. the leading inde endent Pro erty Manage ent co any in Switzerland o ers an integrated service thro gho t the li ecycle o a ro erty with … Property Around 90% Co-ownership Construction management of revenues associations management ▪ Tenant selection, administratio
Slide 38: Property Management – Privera: focus on institutional clients
Property Management – P IVE A …… …… oc ses on instit tional clients d e to its nationwide resence ▪ Fully digitalised processes (incoming mail, application and rental process) ▪ Rents under Management at CHF 1.49bln ▪ 12 offices across the country, FTE of just under 400 ▪ Top 10 clients generate jus
Slide 39: Facility Services – hauswartprofis/conciergepro
Facility Services – hauswartprofis/conciergepro …. …. around 600 ex erts TE’s have been taking care o the in- and outside of buildings for > 30 years Around 80% Maintenance Cleaning Building in residential services buildings ▪ Inhouse maintenance for apartment ▪ Apartments ▪ Guarantee daily operatio
Slide 40: Facility Services – hauswartprofis/conciergepro
Facility Services – hauswartprofis/conciergepro ▪ 13 offices across the country, with FTE of around 600 ▪ Diversified business model with recurring, contract-based revenues ▪ Major player in the market combining all activities of facility services ▪ Management of 2,000 buildings − Residential buildi
Slide 41: Facility Services – Rohr AG, Sea lab and ProLabo
Facility Services – Rohr AG, Sea lab and ProLabo ▪ Revenues of CH 41 in 2020 with around 1,000 employees ▪ Specialist in facade cleaning, maintenance cleaning and integrated building management ▪ Specialised in analysis of asbestos in building material, air, water ▪ Analysis of VDI-filter for air fi
Slide 42: Organisation
Organisation Valid as of March 2021 HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 42
Slide 43: Thank you for your attention!
Thank you for your attention! HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 43
Slide 44: Agenda
Agenda Highlights of HY 2021 Market trends Financial overview HY 2021 Outlook Q&A Annexes HALF-YEAR RESULTS 2021 – IR PRESENTATION – 1 SEPTEMBER 2021 44
Slide 45: Strong shortage of properties for sale despite new constructions
Real Estate Market in Switzerland Strong shortage of properties for sale despite new constructions Housing vacancy in the Geneva canton (as of July 2020) Property for sale Rental housing 3'500 3'000 2'500 Number of units 2'000 1'500 1'000 500 0 Source: OCSTAT HALF-YEAR RESULTS 2021 – IR PRESENTATION
Slide 46: Possible changes in the real estate market post COVID-19
Possible changes in the real estate market post COVID-19 Stronger de and or larger a art ents … b t … Change in demand indices (Feb 2020 – Dec 2020) Source: Credit Suisse, Realmatch360 SWISS REAL ESTATE MARKET POST COVID – VONTOBEL IMMODAY – 24 JUNE 2021 46
Slide 47: Stock of large apartments in Geneva and Lausanne is rather limited
Possible changes in the real estate market post COVID-19 … the stock o large a art ents in Geneva and La sanne is rather li ited INVESTIS does not expect an urban exodus Number of rooms Surface Geneva Lausanne Avg. largest Swiss cities Geneva Lausanne Avg. largest Swiss cities 40% 35% 35% 30% 30% Sh