Slide 1: Company presentation
September 2017 Company presentation 0
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by VGP NV (the “Company” and together with its subsidiaries the “Group”). This Presentation does not constitute or form part of, and should not be construed as, any offer to sell or issue or invitation to purchase or subscribe for,
Slide 3: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 2
Slide 4: Pure-play logistics real-estate group focused on Western and Central & Eastern Europe
Pure-play logistics real-estate group focused on Western and Central & Eastern Europe VGP at a glance Selected VGP logistics parks A leading developer, manager and owner of logistics real VGP Park Rodgau, Germany estate assets clustered in business parks across Europe 50/50 Joint Venture (“JV”)
Slide 5: Pure-play logistics real-estate group (cont'd)
Pure-play logistics real-estate group focused on Western and Central & Eastern Europe (cont’d) Geographic overview Portfolio breakdown (excl. Estonia2) Split by ownership Own Germany: Estonia2: €500mm # parks: 16 # parks: 1 37% GAV: €732.9mm GAV: €50.1mm GLA: 1,237k sqm GLA: 77k sqm JV €844mm Czech
Slide 6: VGP is a fast growing real estate logistics player in Europe
VGP is a fast growing real estate logistics player in Europe… Rapid expansion focused on attractive high growth logistics markets Constitution Expansion JV Becomes top tier developer2 2017 in Sale of minority Acquisition of first land positions in joint positions 2016 JV Closing III ventures
Slide 7: Rapid conversion of acquired land into a yielding portfolio
… and has been able to rapidly convert acquired land into a yielding portfolio Total land acquired (mm sqm)1 Completed gross leasable area (k sqm) 2,291 1,611 601 1,150 601 1,009 735 869 601 593 601 601 549 681 4.9 134 268 416 2013 2014 2015 2016 Jun-17 Jun-17(Incl (incl. 0.6 Under under constr) con
Slide 8: Proven track record of developing high quality properties
Proven track record of developing unique and high quality properties across strategic locations with blue chip tenants Overview of selected VGP assets1 VGP Park Frankenthal VGP Park Hamburg VGP Park Rodgau VGP Park Mango Germany Germany Germany Spain Under construction Start construction 2014 Constr
Slide 9: Proven track record of developing high quality properties (cont'd)
Proven track record of developing unique and high quality properties across strategic locations with blue chip tenants (cont’d) Overview of selected VGP assets1 VGP Park Jenec VGP Park Hrádek nad Nisou VGP Park Timisoara VGP Park Malacky Czech Republic Czech Republic Romania Slovakia Construction 20
Slide 10: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 9
Slide 11: Positive macro-economic fundamentals and growing e-commerce driving demand
Positive macro-economic fundamentals and growing e-commerce are driving demand for logistics assets across Europe Unemployment rate and real GDP growth 2017-2020E Global retail e-commerce sales and % of total retail sales Unemployment rate 17E E-commerce retail sales ($trn) % of total retail sales C
Slide 12: The logistics real estate sector is demonstrating a strong positive outlook
The logistics real estate sector is demonstrating a strong positive outlook Market summary – Europe Effective market rents in Europe ($/sf/yr) Growth Rate 54 Nominal Real +5% +33% on the 5-yr Q1 12.3mm Only 21% of which is >7.5% 5.0-7.5% 52 50 (11%) warehouse take-up sqm under YoY in Q1 2017 average
Slide 13: VGP's markets have an attractive profile: Germany and Spain
VGP’s markets have an attractive profile and show favourable logistics sector dynamics Germany Spain Strong performing economies… Real GDP1 CPI1,2 E-commerce3 Real GDP1 CPI1,2 E-commerce3 1.8% 1.3% 9.1% 3.0% 1.9% 10.7% ’15’-’17 CAGR ’17’-’20 1.6% 1.8% 7.7% 2.0% 3.0% 11.2% CAGR …with favourable suppl
Slide 14: VGP's markets: Czech Republic and Hungary
VGP’s markets have an attractive profile and show favourable logistics sector dynamics (cont’d) Czech Republic Hungary Strong performing economies… Real GDP1 CPI1,2 E-commerce3 Real GDP1 CPI1,2 E-commerce3 ’15’-’17 2.6% 2.0% 10.8% 2.6% 3.1% 13.2% CAGR ’17’-’20 2.8% 1.8% 7.0% 2.9% 0.5% 11.6% CAGR …wi
Slide 15: VGP's markets: Latvia, Romania and Slovakia
VGP’s markets have an attractive profile and show favourable logistics sector dynamics (cont’d) Latvia Romania Slovakia Strong performing economies… Real GDP1 CPI1,2 E-commerce3 Real GDP1 CPI1,2 E-commerce3 Real GDP1 CPI1,2 E-commerce3 ’15’-’17 2.3% 2.2% 11.0% 4.5% 2.0% 16.5% 3.2% 1.8% 9.7% CAGR ’17
Slide 16: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 15
Slide 17: VGP investment highlights
VGP investment highlights Fully integrated business model combining a unique expertise as a 1 developer, asset manager and owner of high-quality logistics assets in Europe Value creation crystallisation through strategic partnership 2 with Allianz enabling capital recycling for all new projects Well
Slide 18: Unique business model in the logistics space in Europe
1 Unique business model in the logistics space in Europe Business model Highlights Develop Acquisition of strategic Focused on the acquisition of strategically located landbank across Western and Central & Eastern Europe landbank Focus on business parks Focuses on developing the assets itsel
Slide 19: Fully integrated business model managed with in-house capabilities
Fully integrated business model managed with in-house capabilities and 1 competences Land Concept & Design Identification of top locations directly connectable to In-house design of Construction existing infrastructure buildings based on Evaluate potential strict guidelines for Rent High qua
Slide 20: Strategic location of assets and developer of business parks enhancing scale
1 Strategic location of assets and developer of business parks enhancing scale Land plots focused on strategic locations VGP Park, Hamburg, Germany VGP Park Plzeň, Czech Republic Well located in proximity to highways and ring roads and along important logistics axes In the vicinity of important
Slide 21: Strategic partnership with Allianz enabling capital recycling
Value creation crystallisation through strategic partnership with Allianz enabling 2 capital recycling for all new projects Description JV structure 50:50 JV with Allianz Real Estate for initial investment period of 5 years after closing of the JV contract (April 29, 2016) Overview Term of JV: 1
Slide 22: Well located and diversified asset portfolio in Europe's growing economies
Annualised committed leases by geography RO, 5% SK, 5% Well located and diversified asset portfolio in Europe’s Central & HU, 5% Western 3 Eastern Europe growing economies (excl. Estonia, incl. 100% JV) Europe CZ, 22% GR, 53% SP, 10% Western Europe Eastern Europe Total 52.8% 10.1% 22.2% 5.4% 0.0% 4.
Slide 23: VGP has grown to become a top tier developer in Germany
3 VGP has grown to become a top tier developer and manager/owner in Germany …with several repeat High growth of acquired landbank (k sqm) … …across Germany… tenants1 2 Top 2 2,599 Berlin Tier 2,222 2 Hamburg 1,813 Developer 1,646 3 2 in Germany Frankfurt GAV (€mm) 732.9 803 Number of parks 16 2
Slide 24: Well-leased portfolio to a blue chip customer base
4 Well-leased portfolio to a blue chip customer base General characteristics for the Top 10 tenants by GLA Key tenants majority of the portfolio 12.2% Triple net leases 9.9% 6.8% 4.9% 4.3% Inflation indexed contracts 3.8% 2.7% 2.5% Quasi fully occupied portfolio 2.1% 2.0% Increasing diversification
Slide 25: VGP to capture value creation opportunities through distinct growth levers
5 VGP to capture ample value creation opportunities through distinct growth levers On balance sheet opportunities Future growth strategy 1 3 1.0mm sqm of landbank On average, acquisition of c. 950k sqm land annually1 Lease of assets under construction c. 438k sqm GLA completed in past 0.5mm of GLA 1
Slide 26: On balance sheet opportunities with clear committed leases conversion
5 On balance sheet opportunities with clear committed leases conversion 1 Under construction (as of 30 June 2017) 2 Remaining potential (as of 30 June 2017) Own portfolio Own portfolio Total / weighted average Total Land area (sqm) 281,968 39,638 340,373 48,510 710,488 Land area 874,554 359,579 346,
Slide 27: New development cycle based on expansion of landbank
5 New development cycle based on expansion of landbank Expansion landbank Run rate development pipeline Approximately 2.1mm sqm of additional land plots identified Dynamic and continuous process of land acquisition, across Europe development and completion of new assets - Represents approximatel
Slide 28: Experienced and highly committed management team with proven track record
6 Experienced and highly committed management team with proven track record Jan Van Geet Chief Executive Officer Jan Papoušek Frank Maeurer Dirk Stoop Tomas Van Geet Chief Operating Officer General Manager Chief Financial Officer Chief Commercial Officer (outside CZ) JV Asset Management Local teams
Slide 29: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview VGP value chain VGP-Allianz JV considerations Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 28
Slide 30: Land acquisition follows a rigorous process with clear investment guidelines
Land Concept and Design Construction Rent Portfolio Land acquisition follows a rigorous process with clear investment guidelines Investment criteria Land acquisition process 1 Active screening and evaluation of potential projects Land directly connected to existing among management and team infr
Slide 31: Land acquisition example: VGP Park Rodgau
Land Concept and Design Construction Rent Portfolio Land acquisition example: VGP Park Rodgau Key statistics Land plot Acquisition date December 2013 Land cost c.€13.0mm Seller type 90+ Private owners Land area 212,740 sqm 103,699 sqm, annualised GLA committed leases of €6.1mm Completed assets Rodga
Slide 32: VGP's logistics assets offer high technical standards and modularity
Land Concept and Design Construction Rent Portfolio VGP’s logistics assets offer high technical standards and great modularity for potential customers All rental spaces can be adapted according to Skylights Lights Roof tenant’s requirements Min. 2% of roof area Energy efficient anti-glare Lo
Slide 33: Concept design follows structured guidelines
Land Concept and Design Construction Rent Portfolio Concept design follows structured guidelines for the development of assets Concept design process Highlights Initial project design is based on standard processes Step 1 and familiar designs used across countries (determined in facility letter) R
Slide 34: Projects are constructed in close cooperation with future tenants
Land Concept and Design Construction Rent Portfolio Projects are constructed in close cooperation with future tenants Key highlights Projects under construction3 Top quality, reliable developer with continuous evaluation Country GLA (sqm) Pre-let (%) as of total General contracting 299,859 82% 58.
Slide 35: Portfolio rental process: Rent and marketing
Land Concept and Design Construction Rent Portfolio Portfolio rental process: Rent and marketing Key marketing tools Customer management approach • Trade fairs Real estate brokers • Strong brand under one flag with “VGP Parks” (primary source of sales leads) • Awareness campaigns through offline &
Slide 36: Portfolio management: Property Management
Land Concept and Design Construction Rent Portfolio Portfolio management: Property Management Property management overview Property management agreements Responsible for managing the proper and undisturbed operation Services to be provided by VGP in respect of facility management of buildings se
Slide 37: Portfolio management: Asset Management
Land Concept and Design Construction Rent Portfolio Portfolio management: Asset Management Asset management overview Asset management key terms Created in 2016 as part of services rendered solely to the JV Selection Acquisition Managing Gives advice and recommendations on asset management and st
Slide 38: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview VGP value chain VGP-Allianz JV considerations Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 37
Slide 39: JV with Allianz Real Estate
JV with Allianz Real Estate Result of a strategic exercise reviewing different alternatives in order to enable VGP to continue to invest in its development pipeline whilst at the same time being adequately financed Entering into a JV with a long term partner would represent the best alternative
Slide 40: JV track record and portfolio overview
JV track record and portfolio overview Track record Landbank portfolio May 2016 By development stage Remaining development GAV: c.€500mm potential Jun-17 8.4% Closing I 15 parks (28 buildings) in Germany, Czech Republic, Slovakia and Hungary October 2016 Completed & under construction Jun-17 91.6% C
Slide 41: Typical cash flow profile following closing of a sale to JV
Typical cash flow profile following closing of a sale to JV Main cash movements following closing Comments 1 At the moment of each closing with the JV, the JV generally Investment property requires a separate valuation from CBRE on all the assets which are being acquired as part of such closing. The
Slide 42: High standards of corporate governance within the VGP-Allianz joint venture
High standards of corporate governance within the VGP-Allianz joint venture 4 managers: 2 appointed by VGP and 2 by Allianz Real Estate Board of Director Decisions about relevant activities are required to be made with unanimous consent of both parties composition Rotating Chairman with no cas
Slide 43: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 42
Slide 44: Summary overview of completed logistics assets
Summary overview of completed logistics assets Germany Spain Czech Republic Cesky Ujezd 14 Hradek nad Nisou 1615 Usti nad Labem 20 14 01 Chomutov Liberec 01 Hamburg Tuchoměřice 14 04 19 Berlin 28 Jenec Barcelona 23 Plzen 28 Madrid 18 Olomouc 11 Gottingen 03 Leipzig 04 21 Brno 08 Wetzlar Bingen 09 06
Slide 45: Summary overview of completed assets (cont'd)
Summary overview of completed assets (cont’d) Hungary Romania Slovakia 29 Gyor 29 Alsónémedi Timisoara 31 Malacky Total parks 2 Total parks 1 Total parks 1 Key metrics Key metrics Key metrics GLA completed: 61,089 sqm GLA completed: 71,644 sqm GLA completed: 68,566 sqm (6% of total completed p
Slide 46: Development portfolio historical yields on cost
Development portfolio historical yields on cost1 Average yields on costs per country since 2014 to 30 June 2017 (excl. JV) Western Europe Eastern Europe 13.0% 12.5% 12.5% 12.5% 12.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 8.5% 7.5% 6.5% 2 Baltics3 Average yields on cost per country since Calculated as an
Slide 47: JLL appraisal valuation of VGP – summary overview
JLL appraisal valuation of VGP – summary overview Key considerations Key valuation methodologies Valuation of all industrial properties which form part of the real estate Discounted 10-year cash flow forecast reflecting portfolio owned by: DCF initial income with renewed leases based on ERV3 V
Slide 48: JLL appraisal valuation of VGP: Own portfolio
JLL appraisal valuation of VGP as of 30 June, 2017 Summary of JLL’s Own portfolio valuation assumptions and outputs Completed Under construction Remaining potential Total Fair value (€mm) 12.0 Fair value (€mm) 69.7 Fair value (€mm) 16.9 98.6 Technique Discounted cash flow Technique Discounted cash f
Slide 49: JLL appraisal valuation of VGP: JV portfolio
JLL appraisal valuation of VGP as of 30 June, 2017 Summary of JLL’s JV portfolio valuation assumptions and outputs Completed Under construction Remaining potential Total Fair value (€mm) 146.7 Fair value (€mm) 5.6 Fair value (€mm) 3.2 155.5 Technique Discounted cash flow Technique Discounted cash fl
Slide 50: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 49
Slide 51: Introductory remarks
Introductory remarks The Company’s consolidated financial statements include those of the Company and its subsidiaries Compliance & basis of Prepared in accordance with the requirements of IFRS which have been adopted by the European Union preparation Prepared on a historic cost basis, with th
Slide 52: Scope of financial information of VGP consolidated statements
Scope of financial information of VGP consolidated statements VGP summary corporate structure The entities included in the AZ Finance VII Luxembourg S.A. SAS AZ Logistique S.A.S.U AZ Benelux S.A. VGP N.V. (40.2%) (6.7%) (3.1%) Group structure to the right, 40.2% 6.7% 3.1% 50% with the exception of
Slide 53: VGP consolidated income statement
VGP consolidated income statement As of 30 June 2016/17 and 31 December 2015/16 ended Comments on the 30 June 2017 half year results Six-Months Ended Reported net rental income down by €4.0mm due to the sale of the in €(000’s) 31-Dec-15 31-Dec-16 30-Jun-16 30-Jun-17 assets to the JV. If we take th
Slide 54: VGP business overview as per management accounts reclassification
VGP business overview as per management accounts reclassification Rental business Property development business Property and asset management business in €(000’s) 2015 2016 1H 2017 in €(000’s) 2015 2016 1H 2017 in €(000’s) 2015 2016 1H 2017 Gross rental income 17,073 16,806 9,111 Net valuation gains
Slide 55: Consolidated balance sheet – Assets
Consolidated balance sheet – Assets For the year ended 31 December 2015 and 2016, and 30 June 2017 ended Comments on the 30 June 2017 half year results in €(000’s) 31-Dec-15 31-Dec-16 30-Jun-17 Investment properties comprise 13 completed assets (353,088 Goodwill 631 - - sqm) and 16 assets under co
Slide 56: VGP consolidated balance sheet – Equity and Liabilities
VGP consolidated balance sheet – Equity and Liabilities As of 30 June 2017 and 31 December 2015/16 ended Comments on the 30 June 2017 half year results in €(000’s) 31-Dec-15 31-Dec-16 30-Jun-17 Issuance of an 8 year €80mm bond (3.35% coupon) at the end of Share capital 62,251 62,251 62,251 March-1
Slide 57: VGP key financial policies
VGP key financial policies Capital structure aimed at maximising value creation while keeping flexibility to support growth Low leverage ratio: As at 30 June 2017, consolidated gearing (net debt / total assets) stood at 34.9% Financing Target maximum consolidated gearing of 55% policy Financ
Slide 58: VGP funding structure (consolidated level)
VGP funding structure (consolidated level) Capitalization table as of 30 June 2017 Debt structure as of 30 June 2017 in €(000’s) Bonds Non-current Financial Debt 386,882 (€mm) Maturity Outstanding Coupon Bond 20172 12-Jul-17 75.0 5.15% Bond 2018 8-Dec-18 74.5 5.10% Other Non-Current Financial Liabil
Slide 59: VGP funding structure (Joint Venture)
VGP funding structure (Joint Venture) Capitalization table as of 30 June 2017 Debt structure as of 30 June 2017 in €(000’s) Bank debt Non-current Financial Debt - Banks 385,873 (€mm) Maturity Outstanding Interest cost Aareal Bank 31-May-26 264.9 8.9 years fixed Non-current Financial Debt – Sharehold
Slide 60: VGP financial summary overview
VGP financial summary overview 1 Rental and development business 2 Ancillary services 353k sqm of GLA €16.5mm of annualised Completed Property 4 countries committed leases1 €3.8mm for the development period ended 30 June 2017 of Under 328k sqm of GLA €10.4mm of annualised Development which €2.3mm co
Slide 61: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 60
Slide 62: VGP holds high standards of corporate governance
VGP holds high standards of corporate governance Highlights Board of directors A relevant number of 5 directors, who are appointed by the General Meeting of Shareholders independent directors on the The Chairman and the CEO are never the same individual Board The CEO is the only Board member
Slide 63: VGP board and board committees composition
VGP board and board committees composition Board of Directors Audit committee Marek Šebesťák Year Executive or Next due for Name Independent appointed non-executive re-election Chairman and Non-executive independent director Year appointed: 2015 (next due for re-election 2019) Jos Thys 2015 Non-ex
Slide 64: High standards of governance reflected in risk management and internal controls
High standards of governance reflected in risk management and internal controls The risk management and control systems Objectives In accordance with the Companies Code and the Belgian Corporate Achievement of objectives related to effectiveness and efficiency of Governance Code 2009 operations
Slide 65: Remuneration structure with long-term incentives aligning management and shareholders
Remuneration structure with long-term incentives aligning management and shareholders’ objectives Remuneration structure (key items) Directorship Short term variable Mid term variable Fixed remuneration Retirement benefits remuneration remuneration remuneration CEO - - Jan Van Geet Executiv
Slide 66: Agenda
Agenda Introduction of VGP Market overview Investment highlights Business overview Portfolio overview Summary financial profile Corporate governance & HR Closing remarks 65
Slide 67: VGP in a nutshell
VGP in a nutshell Fast growing European logistics sector benefiting from positive macro-economic fundamentals, supportive real estate dynamics and growing e-commerce sales Unique pure-play logistics group with a premier portfolio of high-quality buildings suitable for logistical purposes and light i
Slide 68: Appendix
Appendix 67
Slide 69: Corporate organisation
Corporate organisation Chief Executive Officer Jan Van Geet Chief Financial Officer Chief Operating Officer Chief Commercial Officer General/JV Asset Manager Dirk Stoop Jan Papoušek Tomas Van Geet Frank Maeurer Accounting Technical area Product & innovation Corporate & financial strategy Financial m
Slide 70: JLL appraisal valuation of VGP – Valuation methodologies
JLL appraisal valuation of VGP – Valuation methodologies A Cash 10-year cash flow forecast reflecting initial income and any agreed rent indexation flows Assumes new 5-year leases upon termination of the current contracts based on ERV, indexed to EU CPI Discounted Exit value based on estimated
Slide 71: VGP portfolio: Summary of Own portfolio
VGP portfolio Summary of Own portfolio Lettable area Annualised VGP PARK Owner Under Remaining Land area Completed Total committed leases Construction potential (in million €) Germany VGP Park Hamburg VGP 87,952 sqm 0 sqm 0 sqm 30,148 sqm 30,148 sqm € 0.0 VGP Park Berlin VGP 188,455 sqm 0 sqm 89,739
Slide 72: VGP Portfolio: Summary of JV portfolio
VGP Portfolio Summary of JV portfolio Lettable area Annualised VGP PARK Owner Under Remaining Land area Completed Total committed leases Construction potential (in million €) Germany VGP Park Bingen JV 15,000 sqm 6,400 sqm 0 sqm 0 6,400 sqm € 0.40 VGP Park Hamburg JV 537,112 sqm 226,667 sqm 9,376 sq
Slide 73: Consolidated income statement
Consolidated income statement As of 30 June 2016/17 and 31 December 2015/16 ended in €(000’s) 2015 2016 1H 2016 1H 2017 Revenue (excl. other income) 23.1 24.7 17.0 14.3 Gross rental income 17.1 16.8 13.1 9.1 Service charge income 3.5 4.1 3.0 1.4 Service charge expenses (3.1) (3.1) (2.4) (1.3) Proper
Slide 74: Consolidated Balance sheet
Consolidated Balance sheet As of 30 June 2017 and 31 December 2014/15/16 ended As at 30 June As at 31 December in €(000’s) 2017 2016 2015 2014 Assets: Goodwill – – 631 631 Intangible assets 30 14 12 57 Investment properties 500,186 550,262 173,972 146,089 Property, plant and equipment 530 517 378 37
Slide 75: Consolidated Cash Flow statement
Consolidated Cash Flow statement As of 30 June 2016/17 and 31 December 2014/15/16 ended For the six months ended 30 June For the year ended 31 December In €mm 2017 2016 2016 2015 2014 Cash flows from operating activities Profit before taxes 72.7 55.5 113.1 99.1 65.6 Depreciation 0.1 0.3 0.9 0.7 178