Aroundtown Sa · XETR:AT1
Aroundtown Sa — H1 2018 Earnings Presentation
48 slides from Aroundtown Sa's earnings presentation, August 2018
Slide 1: H1 2018 Financial Results Presentation
H1 2018 FINANCIAL RESULTS PRESENTATION AUGUST 2018 Cologne
Slide 2: Table of Contents
TABLE OF CONTENTS HIGHLIGHTS FINANCIAL RESULTS OPERATIONS AND PORTFOLIO APPENDIX 2
Slide 3: Highlights
HIGHLIGHTS Profitability Highlights: Net Rental Income recurring long-term at €278m +51% YoY Adjusted EBITDA at €280m +44% YoY FFO I at €189m +46% YoY, resulting in a FFO I per share of €0.19 +6% YoY FFO II at €300m +93% YoY, as a result of disposal gains to the amount of €111m in the first half of
Slide 4: Financial Results
FINANCIAL RESULTS 4
Slide 5: Profit and Loss
PROFIT AND LOSS Net rental income, recurring long-term* (in €m) 1-6/2018 1-6/2017 € millions NET RENTAL INCOME, RECURRING LONG-TERM 277.7 184.3 CAGR 2015 - Jun 2018 NET RENTAL INCOME 290.9 203.5 +96% REVENUE 347.6 237.2 555 587 415 Property revaluations, capital gains, and other income 899.6 747.7 S
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA 1-6/2018 1-6/2017 € millions Subtracted as these profits include AT’s Operating profit 1,248.7 990.9 share in non-operational profits Total depreciation and amortization 0.8 1 generated by the equity accounted EBITDA 1,249.5 991.9 investees Property revaluations, capital gains, and o
Slide 7: FFO I
FFO I 1-6/2018 1-6/2017 € millions FFO I (in €m) ADJUSTED EBITDA COMMERCIAL PORTFOLIO, 227.3 151 RECURRING LONG TERM CAGR Finance expenses (52.3) (29.8) 2015 - H1 2018 annualized Current tax (20.2) (18.5) 379 +75% Contribution to minorities (3.2) (4.4) Other adjustments 5.1 5.2 293 FFO I COMMERCIAL
Slide 8: Total Assets
TOTAL ASSETS Jun 2018 Dec 2017 ACQUISITIONS (in €bn) TOTAL ASSETS (in €bn) € millions Investment property 11,884.2 9,804.1 Equity accounted-investees in publicly traded company - CAGR 2015 - holding in GCP SA1) 1,690.4 1,609.7 16.9 Equity accounted-investees, other 300.2 295.9 3.7 Non-current assets
Slide 9: EPRA NAV
EPRA NAV Jun 2018 Dec 2017 EPRA NAV (in €bn) € millions Per share € millions Per share NAV per the financial statements 8,548.2 7,249.9 CAGR Equity attributable to perpetual notes investors (1,563.9) (1,173.3) 2015 - Jun 2018 9,505 NAV excluding perpetual notes 6,984.3 6,076.6 Effect of in-the-money
Slide 10: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE Debt maturity profile Proactive debt management Debt maturity Cost of debt 7.4 years average 1.7% Ø maturity cost of debt Hedging structure 97% hedged 91% 6% 3% Fixed, swapped cap variable Loan-to-Value Strong cover ratios 1-6/2018 Unencumbered assets Company BOD limit
Slide 11: Best in class financial ratios among peers
I. BEST IN CLASS FINANCIAL RATIOS AMONG PEERS II. HIGHEST RATED IN GERMAN COMMERCIAL REAL ESTATE Financial risk profile Financial policy: 1 2 3 4 5 6 Minim Modest Intermediate Significant Aggre High al ssive Levera ged Strive to achieve A- global rating in the long term 1 aaa/ bbb- Business risk pro
Slide 12: Operations and Portfolio
OPERATIONS AND PORTFOLIO 12
Slide 13: Commercial Investment Properties (Jun 2018)
COMMERCIAL INVESTMENT PROPERTIES (JUN 2018) Portfolio breakdown per asset type Investment Area EPRA vacancy Annualized net In-place rent per Value per sqm Rental yield properties (in 000' sqm) rent (in €M) sqm (in €) (in €) (in €M) Office 6,371 2,726 11.0% 324 10.8 2,338 5.1% Hotel 2,796 969 5.4% 13
Slide 14: Commercial Portfolio – Potential to Come
COMMERCIAL PORTFOLIO – POTENTIAL TO COME Commercial in-place rent Commercial June annualized Rental Income vs. compared to market rent prices Market potential including vacancy reduction Large upside potential from rent increases to market levels with very limited downside risk Long lease terms with
Slide 15: Top Tier German/NL Cities (Jun 2018)
TOP TIER GERMAN/NL CITIES (JUN 2018) * Others includes, Brussels, Rome, Vienna, Bremen, Nuremberg, Kassel and others 15
Slide 16: Top Tier Cities (Jun 2018)
TOP TIER CITIES (JUN 2018)* Asset Type Breakdown accounting for 38% holding in GCP Residential geographical breakdown Commercial geographical breakdown 16 * all breakdowns are by value
Slide 17: Top Tier Cities within Asset Classes (Jun 2018)
TOP TIER CITIES WITHIN ASSET CLASSES (JUN 2018)* Commercial asset type breakdown Office geographical breakdown - €6.4bn Logistic/Wholesale/Other geographical breakdown - €1.2bn Hotel geographical breakdown - €2.8bn Retail geographical breakdown - €0.9bn 17 * all breakdowns are by value
Slide 18: Best in Class Berlin Portfolio
BEST IN CLASS BERLIN PORTFOLIO 90% of the commercial portfolio is located in top tier neighborhoods • Charlottenburg, Wilmersdorf, Mitte, Kreuzberg, Lichtenberg, Schöneberg, Neukölln, Steglitz and Potsdam • strongly benefiting from the unique dynamics and growth of Berlin’s most in demand neighborho
Slide 19: Berlin
Berlin Potsdamer Platz: The prime commercial and tourist center Potsdamer Platz Office Potsdamer Platz Office Crowne Plaza Potsdamer Platz Potsdamer Platz Checkpoint Charlie Hotel Office Potsdamer Platz Office Office Hilton Gendarmenmarkt Hotel Gendarmenmarkt
Slide 20: Berlin
Berlin landmark property Quality Berlin assets around Kurfürstendamm (Ku’Damm) Moxy by Marriot Berlin Mitte (Gesundbrunnen) Berlin City Center Mitte Hotel Retail/Office AC Hotel by Marriot Berlin Mitte Potsdamer Platz (Gesundbrunnen) Hotel Berlin Center Berlin City Center Mitte Charlottenburg Office
Slide 21: Frankfurt
Frankfurt Quality Frankfurt assets in central locations InterContinental Frankfurt Hotel Frankfurt Office Campus Frankfurt HBF Offices Offices Frankfurt Frankfurt Deutsche Bahn Hauptbahnhof Office (Central Train Station) Frankfurt Frankfurt Büro Center (FBC) Office landmark property
Slide 22: Defensive Portfolio with Strong Tenant Structure
DEFENSIVE PORTFOLIO WITH STRONG TENANT STRUCTURE -Limited dependency on single tenants due to large tenant base of over 2,800 tenants -Top 10 tenants represent less than 20% of rent -Long lease terms -Portfolio WALT as of June 2018: Office Hotel Retail Logistics/Whole Total sale/Other 4.5 years 15.9
Slide 23: Highly Performing Hotel Locations
HIGHLY PERFORMING HOTEL LOCATIONS Hotels by category (by value) Well diversified portfolio of approx. 100 hotels totaling €2.8bn and 969k sqm as of June 2018 High proportion (81%) in 4 star hotels, meeting the rising market demand from tourism and business travel Long-term and fixed leases to third
Slide 24: Strategic Top Tier Hotels in Strong Locations
STRATEGIC TOP TIER HOTELS IN STRONG LOCATIONS • Hilton Berlin Gendarmenmarkt Prime Center (601 rooms) • InterContinental Frankfurt Prime Center (473 Rooms) • Hilton London Hyde Park Prime Center (132 rooms) • Crowne Plaza Berlin Prime Center Potsdamer Platz (256 Rooms) • Marriott/Moxy Berlin Mitte (
Slide 25: Appendix
KS 5A (arounvrown APPENDIX aa FO (iT _ 2
Slide 26: Equity Analyst Research Coverage
EQUITY ANALYST RESEARCH COVERAGE Covering Analysts Analyst Research Target Price Key index inclusions: - MDAX -Global Developed -Europe Developed - FTSE EPRA/NAREIT -Eurozone - STOXX Europe 600 -Germany - GPR 250 26 - DIMAX 26
Slide 27: Aroundtown's Share
AROUNDTOWN‘S SHARE Share performance and total return since initial placement of capital (13.7.2015) The share Frankfurt Stock Placement Exchange Shareholder structure Share issue price/volume development (Prime Standard) 13.07.2015 First equity issuance (€3.2 per share) Number of shares (basic) 1,0
Slide 28: Aroundtown's Bond Performance
AROUNDTOWN’S BOND PERFORMANCE Convertible bond Series C performance since placement (15.12.2015) Spread over mid-€-swap for straight bonds A and D, remaining 4 years 28 28
Slide 29: Capital Market Activity
CAPITAL MARKET ACTIVITY Capital market activity per issuance type 2015-2018 YTD Major index inclusions in 2017/2018 Equity including conversions Perpetuals €4.3bn €1.6bn EUROPE 600 €6.3bn €2.7bn €0.8bn Equity and bond Equity Convertible bonds Straight Bonds bookrunners Largest European Capital marke
Slide 30: ESG – Strong Commitment to Sustainability
ESG – STRONG COMMITMENT TO SUSTAINABILITY In 2018, Aroundtown issued its first annual sustainability report, for the year 2017, demonstrating the Company’s commitment to sustainability and can be found on its website aroundtown.de/sustainability. The report is aimed at the Group’s investors, tenants
Slide 31: Strategy and Business Model
STRATEGY AND BUSINESS MODEL Quality assets STRONG CASH FLOW, QUALITY with a focus on LOCATIONS IN TOP TIER CITIES, large EU cities GROWTH POTENTIAL primarily in Attractive Germany/NL Income generating REPOSITIONING AND acquisitions below portfolios with OPERATIONAL Creation market & below value-add
Slide 32: Management
MANAGEMENT Advisory Board Chairman of the Advisory Board. Dr. Cromme has a long and impressive track record with top positions in Germany’s blue chip companies, including Chairman of the Dr. Gerhard Supervisory Board of Siemens, Chairman of the Executive Board and Chairman of the Supervisory Board o
Slide 33: Operational Management Team
OPERATIONAL MANAGEMENT TEAM Head of commercial operations. Before joining the Group he was a board member of Strabag AG and CEO of Raiffeisen evolution, responsible for project Markus development on 11 European countries with a development volume of more than €2bn. Mr. Neurauter holds a masters in e
Slide 34: Regional Market Overview
REGIONAL MARKET OVERVIEW Hamburg ► GDP growth1: 2.4% ► Migration balance2: 0.9% Bremen ► Population density3: 2,366 per km2 ► GDP growth1 : 5% ► Migration balance2: 0.9% ► Population density3: 1,709 per km2 Hannover ► GDP growth (NI) 1: 2.5% NRW ► Migration balance2: 1.4% ► GDP share 2017 : 21% of t
Slide 35: Germany – Growing and Strong Economy
GERMANY – GROWING AND STRONG ECONOMY German GDP Development (€ trillion) Debt/GDP 2016 Budget Surplus/Deficit 2017 Source: eurostat, forecast based on the European Commission, Winter 2018 forecast Source: Eurostat Source: eurostat Germany has a growing GDP paired with a strong budget discipline… Peo
Slide 36: German Office Market: Low Supply and Strong Demand
GERMAN OFFICE MARKET LOW SUPPLY AND STRONG DEMAND… Office employment outpaces office space** Low addition of new office space** **In Top 7 +Regional 12 locations according to DG HYP: Hannover, Nuremberg, Essen, Leipzig, Dresden, Bremen, Karlsruhe, Münster, Mannheim, Darmstadt, Mainz and Augsburg Con
Slide 37: German Office Market: Increasing Rents and Occupancy
GERMAN OFFICE MARKET …LEAD TO INCREASING RENTS AND OCCUPANCY …reducing vacancy… …across Germany… Vacancy rate …putting upward pressure on rents… …driving office net initial yields down… Office prime rent per €/sqm Prime rents yoy in % (left) In €/sqm (right) 37 Source: DG HYP German Real Estate Mark
Slide 38: Netherlands Office Market
NETHERLANDS OFFICE MARKET …RESULTING FROM FAVOURABLE DEVELOPMENTS Current trends show very favourable market developments… Office Employment Office take-up 2015 -> 2016 4.6% 2016 -> 2017 0.3% Available Vacant space 17% Passing rents* 2016 – 2017 2016 – 2017 2.7% *Excl. incentives Total Office Space
Slide 39: Hotel Market Overview
HOTEL MARKET OVERVIEW Overnight stays across all hotel accommodation types in Germany RevPar development in Germany Source: Smith Travel Research (STR) Hotel operational leases yields across Europe Source: CBRE 39
Slide 40: Macro Fundamentals Support GCP
MACRO FUNDAMENTALS SUPPORT GCP Population development Population density H1 Annualized growth in rent price index* 2017 (persons per sqkm) Source: destatis From 1991 to 2016 the amount of households increased by 16.2% Source: destatis International and domestic immigration trends to cities also supp
Slide 41: Berlin
Berlin 41
Slide 42: Frankfurt
Frankfurt 42
Slide 43: Munich
Munich 43
Slide 44: NRW
Cologne Dortmund Dortmund Cologne Duisburg Essen Düsseldorf Düsseldorf Düsseldorf NRW Essen Düsseldorf Düsseldorf 44
Slide 45: Amsterdam
nelB AD z io enc ceNTER a if & vat ‘ Mt
Slide 46: Stuttgart Baden-Baden
Stuttgart Baden-Baden 46
Slide 47: Hamburg
Hamburg 47
Slide 48: Disclaimer
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 with applicable law, e.g. regarding national and international insider dealing rules, and must not be distribute