Tag Immobilien Ag · XETR:TEG

Tag Immobilien — Q3 2017 Earnings Presentation

37 slides from Tag Immobilien's earnings presentation, November 2017

  1. Slide 1: Conference call presentation Q3 2017

    Conference call presentation Q3 2017

  2. Slide 2: Content

    Content 22 CONTENT I. TAG highlights Q3 2017 3 II. TAG financials Q3 2017 5 III. TAG portfolio Q3 2017 13 IV. TAG acquisitions and disposals FY 2017 17 V. TAG services business 20 VI. TAG guidance FY 2018 24 VII. Appendix 26  Portfolio details by region  Portfolio valuation  EPRA Earnings  LTV c

  3. Slide 3: TAG highlights Q3 2017

    3 TAG TAG acquisitions highlights Q3 2016 2017

  4. Slide 4: TAG highlights Q3 2017

    TAG highlights Q3 2017 44 Q3 2017 Q2 2017 FY 2016 Q3 2016  Vacancy (residential units) 5.3% 5.5% 6.1% 6.7% HIGHLIGHTS Operational  L-f-L rental growth Y-o-Y 1.9% 2.0% 2.0% 1.9% performance  L-f-L rental growth Y-o-Y incl. vacancy reduction 3.0% 3.3% 3.7% 3.8%  FFO I (EUR m) 33.9 30.9 97.0 25.0 

  5. Slide 5: TAG financials Q3 2017

    5 TAG TAG acquisitions financials Q3 2016 2017

  6. Slide 6: TAG income statement (IFRS)

    TAG income statement (IFRS) 66 9M 2016 Strong increase in rental income of EUR 2.9m (in EUR millions) Q3 2017 Q2 2017 9M 2017 FY 2016 ❶ q-o-q INCOME STATEMENT (adjusted) mainly driven by new acquisitions ❶ 74.7 (closing at 30 Jun-2017). Rental income 71.8 218.0 205.2 275.2 Expenses from property Net

  7. Slide 7: TAG EBITDA, FFO and AFFO calculation

    TAG EBITDA, FFO and AFFO calculation 77 (in EUR millions) Q3 2017 Q2 2017 9M 2017 9M 2016 FY 2016 Net income 19.6 51.9 93.6 174.1 200.7 ❶ Improved EBITDA of EUR 1.3m mainly result of higher net rental income (+ EUR 2.4m) and, EBITDA / FFO/ AFFO + Income tax 4.5 13.8 24.1 45.9 46.0 as an opposing eff

  8. Slide 8: TAG balance sheet (IFRS)

    TAG balance sheet (IFRS) 88 (in EUR millions) 30 Sep-2017 31 Dec-2016 BALANCE SHEET Non-current assets 3,993.8 3,843.6 ❶ Book value of investment properties increased by EUR 147.8m mainly due to new acquisitions Investment property ❶ 3,925.6 3,777.8 in 2017. Deferred tax assets 36.4 38.8 Other non-c

  9. Slide 9: TAG EPRA NAV calculation

    TAG EPRA NAV calculation 99 EPRA NAV bridge (in EUR / share) NAV (in EUR millions) 30 Sep-2017 31 Dec-2016 Equity (without minorities) 1,409.9 1,350.9 + Deferred taxes on investment 305.9 287.1 properties and financial derivatives + Fair value of financial derivatives 7.5 4.0 + Difference between fa

  10. Slide 10: TAG cost of debt and LTV

    TAG cost of debt and LTV 10 10  Cost of debt Ø COST OF DEBT / LTV  Continuous reduction of average cost of debt from FY 2015 onwards.  Average cost of debt as of 30 Sep-2017 includes 3.74% 3.45% complete early refinancing of bank loans in June 3.15% 2.34% to August 2017 and issuance of new conver

  11. Slide 11: TAG debt financing structure

    TAG debt financing structure 11 11  Debt maturity profile as of 30 Sep-2017  Interest rates Corporate bonds EUR 319m (13%) FINANCING STRUCTURE Ø interest rate: Bank loans 4.41% EUR 1,992m (77%) 100% fixed rates Total Ø interest rate: financial debt Convertible bonds 2.24% (1) EUR 2,573m EUR 262m (

  12. Slide 12: TAG capital market financing

    TAG capital market financing 12 12  Use market window to secure attractive financing conditions early on Rationale for the  Structure of convertible bond minimizes dilution, gives TAG maximum flexibility with FINANCING STRUCTURE transactions in respect to repayment and impacts positively on FFO I

  13. Slide 13: TAG portfolio Q3 2017

    13 TAGTAG acquisitions portfolio Q3 2016 2017

  14. Slide 14: TAG portfolio in total – as of Sep-2017

    TAG portfolio in total – as of 30 Sep-2017 14 14  TAG is a leader in affordable housing in Northern and Eastern Germany. PORTFOLIO  The portfolio is structured in ten defined regions in large and mid-sized cities.  The management of these regions is conducted in a decentralized fashion.  TAG’s l

  15. Slide 15: TAG vacancy and rental growth development

    TAG vacancy and rental growth development 15 15  TAG is an expert in sourcing, acquiring and managing residential properties with a focus on Eastern and Northern Germany.  TAG exhibits strong local presence in its core regions which allows for excellent market knowledge and efficient operation of

  16. Slide 16: TAG vacancy reduction and rental growth

    TAG vacancy reduction and rental growth 16 16 Vacancy development per region L-f-l rental growth per region (Y-o-Y) 9M 2017 9M 2017 PORTFOLIO 2016 2016 TAG Immobilien AG | November 2017 Basis l-f- l Including vacancy reduction

  17. Slide 17: TAG acquisitions and disposals

    17 TAG acquisitions and disposals TAG acquisitions 2016 FY 2017

  18. Slide 18: TAG acquisitions FY 2017

    TAG acquisitions FY 2017 18 18 Signing Brandenburg Saxony-Anhalt Saxony-Anhalt, Total Saxony ACQUISITIONS Feb-2017 Mar-2017 Lower Saxony, 9M 2017 Oct-2017 Thuringia Jun-2017 Units 1,441 1,252 1,445 4,138 328 Current net cold rent EUR/sqm/month 4.77 4.82 4.78 4.79 4.91 Brandenburg Vacancy 19.3% 7.2%

  19. Slide 19: TAG disposals FY 2017

    TAG disposals FY 2017 19 19 Signing Brandenburg Freiburg Ongoing Total Berlin Feb-2017 Jun-2017 disposals 9M 2017 Oct-2017 9M 2017 DISPOSALS Units 535 457 367 1,359 267 Brandenburg Current net cold 3.61 6.21 --- --- 6.65 rent EUR/sqm/month Vacancy 33.4% 0.0% --- --- 3.5% Selling price 5.5 59.0 13.4

  20. Slide 20: TAG services business

    20 TAGTAG acquisitions services business 2016

  21. Slide 21: TAG services business

    TAG services business 21 21  Facility management (100% owned subsidiary) SERVICES  Caretaker services, cleaning services and gardening  In place since 2012  Main target: improve quality in comparison to external services 9M 2017 2017E 2018E Revenues (EURm) 6.8 8.9 9.5 c. 46,000 units covered in

  22. Slide 22: TAG services business

    TAG services business 22 22  Energy services (100% owned subsidiary) SERVICES  Heating services for tenants (TAG as owner and operator of heating facilities)  In place since 2016  Main target: create additional income for TAG and reduce energy costs/ service charges for tenants in EUR/m 9M 2017

  23. Slide 23: TAG services business

    TAG services business 23 23  Condominium management (100% owned subsidiary) SERVICES  Condominium management (“WEG-Verwaltung”) for homeowners’ associations  Includes management for third parties as well as management of units owned by TAG  4 main locations (Berlin, Erfurt, Gera and Hamburg) wit

  24. Slide 24: TAG guidance FY 2018

    24 TAG TAG acquisitions guidance 2016 FY 2018

  25. Slide 25: TAG guidance FY 2018

    TAG guidance FY 2018 25 25  FFO EUR 119m-121m (FY 2016 EUR 97m) GUIDANCE FY 2017 (unchanged)  FFO/s EUR 0.82 (FY 2016: EUR 0.72)  Dividend/s EUR 0.62 (FY 2016: EUR 0.57)  FFO EUR 135m-137m (c. EUR 16.0m or 13% increase y-o-y, mainly driven by higher rents of c. EUR 10.5m, reduced interest costs

  26. Slide 26: Appendix

    26 26 APPENDIX APPENDIX TAG Immobilien AG | November 2017

  27. Slide 27: TAG portfolio details by region – Sep-2017

    TAG portfolio details by region – Sep-2017 27 27 Region Units Rentable IFRS BV In- Vacancy Vacancy Current Re- L-f-l rental L-f-l rental Mainte- Capex # area EURm place Sep- Dec- net letting growth growth nance sqm yield 2017 2016 cold rent y-o-y y-o-y incl. EUR/sqm EUR/sqm APPENDIX rent EUR/ vacanc

  28. Slide 28: TAG semiannual valuation by CBRE

    TAG semiannual valuation by CBRE 28 28 Key metrics Main results of semiannual valuation carried out at 30 Jun-2017  Alignment in treatment of transaction cost with peer group due to increased APPENDIX Jun-2017 Sep-2016 Sep-2016 uncertainty of future treatment of share deals with respect to real est

  29. Slide 29: TAG portfolio valuation details – 9M 2017

    TAG portfolio valuation details – 9M 2017 29 29 Region Sep-2017 Sep-2017 Sep-2017 9M 2017 Share of Share of Change in 9M 2017 Dec-2016 Dec-2016 Dec-2016 Fair value Fair value Implied Revaluation yield operational treatment of Net Fair value Fair value Implied (in EUR millions) (IFRS) (EUR/sqm) multi

  30. Slide 30: TAG EPRA Earnings

    TAG EPRA Earnings 30 30 (in EUR millions) Q3 2017 Q2 2017 9M 2017 9M 2016 FY 2016 Net income 19.6 51.9 93.6 174.1 200.7 APPENDIX Valuation result 0.2 -39.8 -39.3 - 163.6 -163.1 Deferred income taxes on valuation result 0.0 9.1 12.8 44.2 43.6 Net revenues from sales -0.3 -0.5 -0.9 -1.8 -1.8 Cash taxe

  31. Slide 31: TAG LTV calculation

    TAG LTV calculation 31 31 APPENDIX (in EUR millions) 30 Sep-2017 31 Dec-2016 Non-current and current liabilities to banks 1,927.1 1,826.5 Non-current and current liabilities from corporate bonds 322.0 443.7 Non-current and current liabilities from convertible bonds 255.5 0.0 Cash and cash equivalent

  32. Slide 32: TAG capex and maintenance

    TAG capex and maintenance 32 32 APPENDIX in EUR millions 2016 2017 Total portfolio Q1 Q2 Q3 Q4 Total FY Q1 Q2 Q3 Total 9M Maintenance 6.6 6.6 5.8 6.0 25.0 7.3 6.9 7.5 21.7 Capex 9.6 11.7 13.6 11.6 46.5 7.9 9.9 11.8 29.6 Total 16.2 18.3 19.4 17.6 71.5 15.2 16.8 19.3 51.3 in EUR/sqm 2016 2017 Resident

  33. Slide 33: TAG return on capex

    TAG return on capex 33 33  Modernization is key element of TAG’s strategy  Methodology APPENDIX Capex measures can be broken down into 1 Incremental revenues = Return on investment  Modernization during re-letting Total investment (tenant turnover)  Modernization of vacant flats 2 Incremental re

  34. Slide 34: TAG return on capex

    TAG return on capex 34 34 Total capex 9M 2017: EUR 29.6m APPENDIX FY 2016: EUR 46.5m (FY 2015: EUR 40.1m) Single unit program Property based program (Equity financed) (Modernisation capex, partly debt financed) Share of total capex: c.70% in 9M 2017 Share of total capex: c. 30% in 9M 2017 (c.56% in

  35. Slide 35: TAG shareholder structure

    TAG shareholder structure 35 35 Shareholder structure as of 31 Oct-2017  Number of shares (issued) APPENDIX 146.5m  Market capitalisation (30 Sep-2017) EUR 2.1bn  Stock indices MDAX/EPRA  Free Float * 100% * Deutsche Börse definition including institutional investors Erfurt Gera Wittenberg TAG I

  36. Slide 36: TAG management board

    TAG management board 36 36 APPENDIX Claudia Hoyer Martin Thiel Dr. Harboe Vaagt COO CFO CLO  Key responsibilities: Property and  Key responsibilities: Controlling,  Key responsibilities: Legal, Human Asset Management, Acquisitions and Accounting, Financing, Taxes, Resources and Transactions Dispo

  37. Slide 37: TAG Contacts

    37 37 TAG Contacts APPENDIX Martin Thiel Dominique Mann TAG Immobilien AG CFO Head of Investor & Public Relations Steckelhörn 5 Phone: +49 40 380 32-222 Phone: +49 40 380 32-305 20457 Hamburg Fax: +49 40 380 32-388 Fax: +49 40 380 32-388 Phone: +49 40 380 32-0 ir@tag-ag.com ir@tag-ag.com Fax: +49 40

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