Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — FY2011 Earnings Presentation
68 slides from Altarea Sca's earnings presentation, 2012
Slide 1: 2011 Annual Results
2011 ANNUAL RESULTS L’IMMOBILIER EN 3 DIMENSIONS www.altareacogedim.com
Slide 2: Index
INDEX 1. Introduction – Alain Taravella 2. Residential – Christian de Gournay 3. Office – Stéphane Theuriau 4. Retail – Gilles Boissonnet RueduCommerce – Gauthier Picquart 5. Finance – Eric Dumas 6. Outlook – Alain Taravella 2011 ANNUAL RESULTS 2
Slide 3: Introduction
INTRODUCTION Alain Taravella 2011 ANNUAL RESULTS 3
Slide 4: Altarea Cogedim is active in all three major property markets
ALTAREA COGEDIM IS ACTIVE IN ALL THREE MAJOR PROPERTY MARKETS RETAIL RESIDENTIAL OFFICE Innovation: the key driver The first Multi-Channel Recurrence and Added-Value Property Company 2011 ANNUAL RESULTS 4
Slide 5: Altarea Cogedim: an entrepreneurial project
ALTAREA COGEDIM : AN ENTREPRENEURIAL PROJECT INNOVATION AS A KEY DRIVER New products / concepts A method, an approach TECHNOLOGY BRANDS LONG TERM PARTNERSHIPS Cogedim / RueduCommerce / At the forefront of the Family Village… Predica / ABP / CDC Internet (e-commerce) French banks green revolution THE
Slide 6: Strategy roll-out & enhanced competitive edge
STRATEGY ROLL-OUT & ENHANCED COMPETITIVE EDGE RESIDENTIAL • Market share gain: €1.2 Billion (tax included) in reservations, 5.5% of the French market in value • Enlarged product range and geographic presence • Backlog: €1.6 Billion (excl. tax), i.e. 24 months’ revenues OFFICE • Delivery of 7 office
Slide 7: Environmental performance
ENVIRONMENTAL PERFORMANCE • A sustainable development approach rewarded by a high ranking in Novethic barometer 2009 2011 Developer Ranking Developers: Developers: Design and construction of Design and construction of real estate programs real estate programs Property Ranking Property company: Prope
Slide 8: 2011 Results
2011 RESULTS PER SHARE, IN € 2011 Var. 2010 Funds from Operations (1) €13.1 + 12% NAV (going-concern) €147.2 + 6% Loan-to-value (2) 51.2% - 200bp Proposed Dividend (3) €9.0 + 12.5% (1) Results before changes in fair value and non cash expenses (2) Net financial borrowing / Value of assets (3) Propos
Slide 9: Residential
RESIDENTIAL Christian de Gournay 2011 ANNUAL RESULTS 9
Slide 10: Nouvelle Vague, an exceptional development
NOUVELLE VAGUE, AN EXCEPTIONAL DEVELOPMENT • On the banks of the Seine, on quai Henri IV, in the 4th arrondissement of Paris • Designed by Berlin-based architects Finn Geipel – Lin agency • 73 residential units, €16,000 /sqm • Delivery projected 3rd quarter 2014 2011 ANNUAL RESULTS 10
Slide 11: Cogedim in 2011: key figures
COGEDIM IN 2011: KEY FIGURES In € Millions 2011 2010 Change REVENUES (excl. tax) 822 577 +42% OPERATING MARGIN (1) 10.5% 9.1% +140bps BACKLOG (excl. tax) (2) 1,620 1,395 +16% Backlog = 2 years’ revenues excl. tax (1) Operating cash flow / Revenues (2) The backlog comprises revenues excl. tax from
Slide 12: Continued gains in market share
CONTINUED GAINS IN MARKET SHARE Domestic market share by value Cogedim Reservations (€ Million tax incl.) Laennec 6,0% 5.3% 5.5% 5,0% +14% 4,0% 3,0% 2.5% 2,0% 1,0% 0,0% 2007 2010 2011 • Domestic market estimated at €22 Billion (1) • Ile-de-France (Paris Region, 62% of sales by in 2011, down 9% in va
Slide 13: Our analysis of the market
OUR ANALYSIS OF THE MARKET - Uncertainty Factors + Fundamentals > Structural gap in new housing vs. rise in > Election year number of households > Recession > Political will to build more > Consumer confidence > Weak commercial offer > Access to credit > Individual aversion to financial risk Down Va
Slide 14: Our strategy
OUR STRATEGY • A wider range to cover the many markets • Marketing based on: > Brand capital > Multi-channel client approach > Innovation 2011 ANNUAL RESULTS 14
Slide 15: Cogedim, the premium leader
COGEDIM, THE PREMIUM LEADER L’Elégante – Cannes €8,900 /sqm Cours Dillon – Toulouse €4,800 /sqm Rive Lémania – Divonne €6,000 /sqm 2011 ANNUAL RESULTS 15
Slide 16: Cogedim, a major new player in the mid-market
COGEDIM, A MAJOR NEW PLAYER IN THE MID-MARKET Quality materials Natural lighting Wood and fine plaster Volume in hallways of façades Terres d’Ocre – Martigues €3,200 /sqm Lofoten – Cergy €3,700 /sqm Emalia – Montreuil €4,300 /sqm 2011 ANNUAL RESULTS 16
Slide 17: New entry-level developments
NEW ENTRY-LEVEL DEVELOPMENTS Rillieux Village – Greater Lyon €2,680 /sqm - Delivery 2011 Bruges Grand Darnal – Bordeaux €1,850 /sqm - Delivery 2011 to SNI Miramas (Provence) Breaking ground 2012 2011 ANNUAL RESULTS 17
Slide 18: A brand-based strategy
A BRAND-BASED STRATEGY • The leading brand in the French market • Constant search for quality at every price point > Choice locations > Elegant architecture > Lasting materials > Quality execution • Personalizing real-estate products > Decoration of common areas: 100% unique > Apartment lay-outs: 10
Slide 19: A strategy based on a multi-channel customer approach
A STRATEGY BASED ON A MULTI-CHANNEL CUSTOMER APPROACH PHYSICAL CHANNEL ONLINE CHANNEL Ile-de-France Atlantique Savoies-Leman Grand-Lyon Grenoble Aquitaine Languedoc- Méditerranée Roussillon Midi-Pyrénées Extranet Cogedim-partenaires.com Provence Cogedim.com iPad Application • 10 affiliates • Phone r
Slide 20: An innovation-based strategy (1/3)
AN INNOVATION-BASED STRATEGY (1/3) • Office to Residential > Example: “Sky” in Courbevoie (€8,700 /sqm) Before After 2011 ANNUAL RESULTS 20
Slide 21: An innovation-based strategy (2/3)
AN INNOVATION-BASED STRATEGY (2/3) • The “Cogedim Club” Senior Residences > 3 residences launched in 2011 > 10 launched planned for 2012 Jardin d’Aragon – Villejuif Arcachon €6,300 /sqm €7,300 /sqm Cour des Lys – Sèvres €7,800 /sqm (Office to residential) 2011 ANNUAL RESULTS 21
Slide 22: An innovation-based strategy (3/3)
AN INNOVATION-BASED STRATEGY (3/3) • New Districts > Example: Massy Grand Ouest (91) 2011 ANNUAL RESULTS 22
Slide 23: Outlook for 2012: continued market share growth
OUTLOOK FOR 2012: CONTINUED MARKET SHARE GROWTH • Sales Potential = 3 years’ reservations (€3,620 Million tax incl.) (1) • Position in markets where fundamentals are still intact « END USERS’ » INSTITUTIONAL INVESTMENT MARKET INVESTORS • The premium markets are • Wealth management- • New development
Slide 24: Office
OFFICE Stéphane Theuriau 2011 ANNUAL RESULTS 24
Slide 25: First: showcasing Altarea Cogedim's know-how in office products
FIRST: SHOWCASING ALTAREA COGEDIM’S KNOW-HOW IN OFFICE PRODUCTS • 87,000 sqm - 231 meters high (tallest office tower in France), delivered in Feb 11 • Largest HQE-certified project in France • MIPIM Award 2011, Pierre d’Or 2011, Grand Prix SIMI 2011, French National Engineering Prize 2009 • 74% rent
Slide 26: Altarea Cogedim Office in 2011: salient figures
ALTAREA COGEDIM OFFICE IN 2011: SALIENT FIGURES 2011 2010 DELIVERIES SQM 170,000 71,000 TAKE UP € MILLIONS 131 332 BACKLOG € MILLIONS 163 194 2011 ANNUAL RESULTS 26
Slide 27: Delivered in 2011: 170,000 sqm in 7 projects
DELIVERED IN 2011: 170,000 SQM IN 7 PROJECTS Tour First Korus T2 Green One • La Défense • Suresnes • Paris 18th • 87,000 sqm • 39,000 sqm • 5,000 sqm • HQE, THPE • HQE • HQE, BBC 2011 ANNUAL RESULTS 27
Slide 28: Take up 2011: €131 million
TAKE UP 2011: €131 MILLION Nexans, Lyon Chartis, La Défense AXA Suresnes • Off-plan 25,000 sqm • HQE, BBC • Management mandate • 19,000 sqm • HQE, BREEAM, RT 2012 • Management mandate • 30,000 sqm • HQE 2011 ANNUAL RESULTS 28
Slide 29: Recently closed
RECENTLY CLOSED Mercedes Benz France Rue des Archives, Paris • Forward lease (12 years) 19,000 sqm • Development contract 22,000 sqm for • HQE, BBC, BREEAM Excellent GE REAL ESTATE 2011 ANNUAL RESULTS 29
Slide 30: Our analysis of the market
OUR ANALYSIS OF THE MARKET - Down Cycle + Opportunities > Decline in effective placed > New offers drying up Rental Market demand > “Low cost” story > Decline in real rents > Exceptional buildings > Users seeking savings The Developer as Observation Keystone > Growing volumes in “Core” > Need for mo
Slide 31: A complete services offering adapted to client needs
A COMPLETE SERVICES OFFERING, ADAPTED TO THE NEEDS OF EACH OF OUR CLIENTS Mandated Fund Development Management Management Users Investors Asset Development Management Contract Off-plan 2011 ANNUAL RESULTS 31
Slide 32: Large equity investment capacity
LARGE EQUITY INVESTMENT CAPACITY • AltaFund, a €600 Million investment vehicle (initial objective €500 Million), yields €1.2 Billion investment potential. • Investor base comprised of French institutions and overseas sovereign wealth funds – contribution of Altarea Cogedim Group €100 Million (16.7%)
Slide 33: Under pre-marketing phase
UNDER PRE-MARKETING PHASE Cœur de Quartier Cœur d’Orly Nanterre • 22,500 sqm • HQE, BBC, BREEAM • 70,000 sqm Excellent • HQE, BBC • Housing, retail • Retail Asnières Edge Antony TR 2 • 17,000 sqm • HQE, BBC • 22,000 sqm • Housing • HQE, BBC New projects with no rental risk 2011 ANNUAL RESULTS 33
Slide 34: Retail
RETAIL GILLES BOISSONNET 2011 ANNUAL RESULTS 34
Slide 35: Villeneuve-la-Garenne, a major operation
VILLENEUVE-LA-GARENNE, A MAJOR OPERATION • 63,000 sqm GLA (Carrefour + 160 retail units) • Major additional leisure center under consideration • Over 60% pre-sold 2 years before opening 2011 ANNUAL RESULTS 35
Slide 36: Our analysis of the market
OUR ANALYSIS OF THE MARKET Stable overall Accelerated consumer household consumer spending on the Internet spending Development of a new generation of nomadic Leisure Development consumers (who switch from one (multiplexes, channel to the other, from premium to restaurants,…) discount) CHANGES IN CO
Slide 37: Pursuing our product strategy
PURSUING OUR PRODUCT STRATEGY Family Village / Retail Park Large regional centers Leisure, a transversal component Areas with strong potential 2011 ANNUAL RESULTS 37
Slide 38: Reminder of strategic plan
REMINDER OF STRATEGIC PLAN To 2009 2010 / 2013 2013 / 2015 Development Redeployment Development 2015 Targets • Strong asset growth in • New initiatives • Delivery of major multiple formats • Restructuring developments • 55 assets at 2009 year- • Disposals • 30 to 35 assets end • Av. value / asset: €
Slide 39: Snap-shot of assets and projects at 2011 year-end
SNAP-SHOT OF ASSETS AND PROJECTS AT 2011 YEAR-END ASSETS PROJECTS In € Millions In € Millions Value (Duty Included) 100% 3,310 Net Investments (2) 1,414 Company’s share 2,618 Company’s share 815 Rents 200 Rents projected 126 Capitalization rate (1) 6.15% Yield (3) 8.9% -14bp (1) Net rental yield ove
Slide 40: A capital rotation strategy
A CAPITAL ROTATION STRATEGY DISPOSALS LAUNCHES • 3 small city-center assets • Villeneuve La Garenne regional center 63,400 sqm Vichy Thionville Reims (1) • 2 retail parks (Crèches, Majes) • Nîmes Costières Family Village • Liquid, well located, stabilized assets (average size € 32 Million) 27,500 sq
Slide 41: Increase of average asset size
INCREASE OF AVERAGE ASSET SIZE +12% Number of assets 55 54 49 (1) Figures at 100% the average unit value of assets under shared ownership is €53.4 Million, up by 10%) 2011 ANNUAL RESULTS 41
Slide 42: Focus on large retail parks and large shopping centers
FOCUS ON LARGE RETAIL PARKS AND LARGE SHOPPING CENTERS In 2009 In 2011 Large Retail Neighborhood/city Parks (Family center Shopping Villages) Centers Regional Shopping Centers 2011 ANNUAL RESULTS 42
Slide 43: Focus on dynamic geographical areas
FOCUS ON DYNAMIC GEOGRAPHICAL AREAS In 2009 In 2011 North and Ile de France East (Paris region) 20% 12% FRANCE (1) 39% 20% 39% 27% South-West / Atlantic Coast 14% 29% Eastern Mediterranean / Rhône-Alpes Barcelona Italy – INTERNATIONAL (2) 27% North 21% 8% 71% 12% 61% Italy – South (1) France: 84% of
Slide 44: Improved shopping center performance / strong retail activity
IMPROVED SHOPPING CENTER PERFORMANCE / STRONG RETAIL ACTIVITY Tenants’ Revenues (1) Bad debt (2) Financial vacancy (3) 104.6 105.2 2.4% 2.2% 3.2% 3.2% 1.7% 100.0 2.8% 2009 2010 2011 2009 2010 2011 2009 2010 2011 • 245 leases signed (4) of which 154 on existing assets and 91 on assets under developme
Slide 45: Development
DEVELOPMENT The project portfolio is equivalent to 60% of current asset base • Pipeline has 400,000 GLA sqm (1) > 7 new projects > 8 extensions and/or restructurings Authorisation process: significant achievements in 2011 • 110,000 sqm authorized in 2011 (1) > 3 new projects (Nîmes, Le Mans, Roncq)
Slide 46: Illustrating our development: Family Village
ILLUSTRATING OUR DEVELOPMENT Family Village Nîmes Le Mans Roncq • Strengthened presence in South- • Phase 2 of the Group’s 1st Family • On the Belgian border East France Village, opened in 2007 • Regional hub • A Retail Park in a regional hub • New Auchan hypermarket • Near 2nd largest Auchan • Sold
Slide 47: Illustrating our development: Regional Shopping Centers
ILLUSTRATING OUR DEVELOPMENT Regional Shopping Centers Villeneuve La Garenne Toulon La Valette Ponte Parodi, Genoa • New regional shopping center in • In one of the largest consumer • A showcase 67,000 m² project Hauts de Seine (Carrefour + 160 markets in the South of France • Integrated in the Geno
Slide 48: Illustrating our development: Extensions / Refurbishments
ILLUSTRATING OUR DEVELOPMENT Extensions / Refurbishments CAP 3000 Massy Toulouse • Restructuring 3,000 sqm with 12 • Regional scale site near 2nd • Execution of Phase 2 of the new brands largest CORA hypermarket in Gramont shopping center • Preparation of a large-scale France extension, with over 80
Slide 49: Gauthier Picquart
Gauthier Picquart 2011 ANNUAL RESULTS 49
Slide 50: RueduCommerce: successful tender offer and integration
RUEDUCOMMERCE: SUCCESSFUL TENDER OFFER AND INTEGRATION INTO GROUP ALTAREA COGEDIM 96.54% success rate for tender offer Integration process underway • Integration of legal, financial and reporting completed • Respective teams now take into account operational issues affecting ALTAREIT each other ALTA
Slide 51: E-commerce: a very fast-growing market
E-COMMERCE: A VERY FAST-GROWING MARKET Source: Fevad Source: Fevad Only 1% of sites perform 100,000 transactions More and more cybercustomers who are per year buying more and more Internet Segments Annual growth (1) Penetration Fashion / apparel 8% 14% Electronics 11% 8% Media 11% 17% Home / Garden
Slide 52: RueduCommerce: a leading site for audience and traffic
RUEDUCOMMERCE: A LEADING SITE FOR AUDIENCE AND TRAFFIC OF VISITORS 6 to 8 Million 5.5 Million 87% of unique visitors per month client accounts awareness (women 44%, men 56%) Sites Activité U.V. / mo. (1) 1 Le Bon Coin General Merchandise, petites annonces B/C 14.6 2 Amazon General Merchandise, marke
Slide 53: La Galerie: a successful model
« LA GALERIE »: A SUCCESSFUL MODEL 1 ORDER Forward the Payment MARCHAND 2 PAYMENT Commission PARTENAIRE to RDC 3 DELIVERY Partners' Revenues (€ Million excl. tax) • 2 Million products 95 • 658 merchant partners 68 • 932,000 orders 46 • €138 tax incl. average order 20 3 • +39% turnover in 2011 2007 2
Slide 54: RueduCommerce advantages for Altarea Cogedim
RUEDUCOMMERCE ADVANTAGES FOR ALTAREA COGEDIM > A mass media which delivers access to 1 French person out of 10 each month (6 to 8 million single, differentiated visitors per month in buying mode) > One of the largest French webmerchants (revenues generated: €384 M) > 5.5 Million client accounts, geo
Slide 55: Altarea Cogedim – RueduCommerce: mutually enhancing, sources of innovation
ALTAREA COGEDIM – RUEDUCOMMERCE: MUTUALLY ENHANCING, SOURCES OF INNOVATION Technological leverage to deliver high value-added For innovations to benefit brands and final customer the Retail Property Co Resources for a new stage in its developement For (target turnover over €1 Billion) RueduComme
Slide 56: Finance
FINANCE Eric Dumas 2011 ANNUAL RESULTS 56
Slide 57: 2011 Results: summary
2011 RESULTS: SUMMARY In € Millions 2011 2010 Change REVENUES 1,113.0 863.5 +29% OPERATING CASH FLOW 220.0 197.8 +11% FUNDS FROM OPERATIONS (FFO) 140.4 122.5 +15% NET IFRS EARNINGS 94.0 150.2 -37% AFTER CHANGES IN FAIR VALUE 2011 ANNUAL RESULTS 57
Slide 58: Revenues: +29%
REVENUES: +29% In € Millions Retail (1) Residential (2) Office (3) 2011 Rental income 162.1 -1% 162.1 Revenues by percentage of 821.5 +42% 102.0 +56% 923.5 +44% completion Fees 16.5 +21% 1.0 n/a 6.1 -43% 23.6 -15% Misc. 3.8 3.8 Revenues 182.4 +0.4% 822.5 +42% 108.1 +43% 1,113.0 +29% (1) - Rental inc
Slide 59: Operating cash flow: +11%
OPERATING CASH FLOW: +11% In € Millions Retail (1) Residential (2) Office (3) 2011 Net rents 148.8 -2% 148.8 Net margins 101.7 +72% 3.1 -47% 104.8 Net overhead (21.5) (15.7) (1.7) (38.9) Share in associated companies (Rungis…) 8.2 0.1 (1.3) 7.0 Other (1.7) (1.7) Operating Cash Flow 135.4 -3% 86.1 +6
Slide 60: Funds from operations: +14.6%
FUNDS FROM OPERATIONS: +14.6% In € Millions 2011 2010 Operating cash flow 220.0 197.8 Net cost of debt (78.7) (74.8) (1) Corporate income tax paid (0.8) (0.5) (2) FUNDS FROM OPERATIONS (FFO) 140.4 122.5 +14.6% FFO Group share 134.3 119.8 +12.1% FFO per share €13.1 €11.7 +12.4% (1) Slight increase in
Slide 61: Net earnings before financial instruments: +8.3%
NET EARNINGS BEFORE FINANCIAL INSTRUMENTS: +8.3% (-37.4% AFTER FI) In € Millions 2011 2010 Funds from operations 140.4 122.5 Income/loss from asset sales 6.3 37.8 (1) Var. in appraised value of investment properties 70.0 48.7 (2) Transaction costs* (13.3) - Deferred taxation (8.8) (13.2) Estimated e
Slide 62: NAV per share: €147.2 (+5.7%)
NAV PER SHARE: €147.2 (1) (+5.7%) o/w €6.9 Retail Variation in o/w €4.3 Residential Funds from asset values NAV/share NAV/share Operations +€11.8 €147.2 €139,3 +€13.1 Other (€1.2) Financial Instruments Dividend (€7.8) (€8.0) + 5.7% Dec 2010 Dec 2011 (1) Diluted going-concern NAV net of financial ins
Slide 63: Consolidated net borrowing
CONSOLIDATED NET BORROWING Net borrowing: €2,081 M Consolidated covenants - Corporate RETAIL 90% LTV ICR MORTGAGE CORPORATE Covenant ≤ 65% ≥ 2x FINANCE BORROWING 46% December 2011 51.2 % 2.8x 55% DEVELOPMENT December 2010 53.2% 2.7x FINANCE -1% - 200 bp RESIDENTIAL/OFFICE 10% • Cash and cash equival
Slide 64: Outlook
OUTLOOK Alain Taravella 2011 ANNUAL RESULTS 64
Slide 65: Durable performance
DURABLE PERFORMANCE NAV / share FFO / share Dividend / share €13.1 €9.0 €147.2 €77.8 €4.1 €2.4 2005 2011 +11 % / year +21 % / year +25 % / year 2011 ANNUAL RESULTS 65
Slide 66: 2012-2013: 2-year operating outlook for Altarea Cogedim
2012-2013: 2-YEAR OPERATING OUTLOOK FOR ALTAREA COGEDIM RETAIL RESIDENTIAL OFFICE Stable consumer Markets changes Selective recovery OUR MARKETS spending of office market (low cost, green) Revenue growth Gain market share 1st investments by like-for-like (re- (broader range and AltaFund
Slide 67: Key variables for 2012 results
KEY VARIABLES FOR 2012 RESULTS - + • Rents consolidating in • Strong earnings increase OPERATIONS Shopping Centers in Residential and 1st profits from Office • Increase in financing • Borrowing down FINANCE costs • Spending for the future • Continued growth of INVESTING FOR THE FUTURE « Outlook 2014
Slide 68: Guidelines for 2012
GUIDELINES FOR 2012 + 10% FFO and Dividend Growth With LTV ± 50% 2011 ANNUAL RESULTS 68