Aroundtown Sa · XETR:AT1
Aroundtown Sa — Q3 2018 Earnings Presentation
52 slides from Aroundtown Sa's earnings presentation, November 2018
Slide 1: Q3 2018 Financial Results Presentation
Q3 2018 FINANCIAL RESULTS PRESENTATION NOVEMBER 2018 Frankfurt
Slide 2: Table of Contents
TABLE OF CONTENTS HIGHLIGHTS & ACHIEVEMENTS FINANCIAL RESULTS OPERATIONS AND PORTFOLIO APPENDIX 2
Slide 3: Highlights
HIGHLIGHTS Profitability Highlights: Net Rental Income recurring long-term at €440m +50% YoY Adjusted EBITDA at €440m +45% YoY FFO I at €297m +46% YoY, resulting in a FFO I per share of €0.29 +12% YoY FFO II at €465m +95% YoY, as a result of disposal gains to the amount of €167m in the first nine mo
Slide 4: Achievements
ACHIEVEMENTS Outperformer in the 93rd percentile globally peers Aroundtown is ranked Outperformer in the 93rd percentile globally among 319 real estate peers, received in September 2018. This demonstrates a strong development over the last year ranking, in which Aroundtown was ranked in the 88th per
Slide 5: Financial Results
FINANCIAL RESULTS 5
Slide 6: Profit and Loss
PROFIT AND LOSS Net rental income, recurring long-term* (in €m) 1-9/2018 1-9/2017 € millions REVENUE 539.8 373.7 CAGR 2015 - Sep 2018 NET RENTAL INCOME, RECURRING 439.7 292.7 +90% 586 639 Property revaluations, capital gains, and other income Share in profit from investment in equity-accounted 1,244
Slide 7: Adjusted EBITDA
ADJUSTED EBITDA 1-9/2018 1-9/2017 € millions Subtracted as these profits include AT’s share in Operating profit 1,799.5 1,368.3 non-operational profits generated by the equity Total depreciation and amortization 5.9 1.7 accounted investees EBITDA 1,805.4 1,370.0 Property revaluations, capital gains,
Slide 8: FFO I
FFO I 1-9/2018 1-9/2017 € millions FFO I PER SHARE (in €) DIVIDEND PER SHARE (in €) ADJUSTED EBITDA COMMERCIAL PORTFOLIO, 359.8 237.3 CAGR CAGR RECURRING LONG TERM Finance expenses (81.8) (48.0) 2015 - 9M 2018 annualized 2015 - 9M 2018 annualized +35% +79% Current tax (32.9) (26.5) 0.39 0.25 Contrib
Slide 9: Total Assets
TOTAL ASSETS Sep 2018 Dec 2017 ACQUISITIONS (in €bn) TOTAL ASSETS (in €bn) € millions Investment property 13,157.4 9,804.1 CAGR 2015 - Equity accounted-investees in publicly traded company - Sep 2018 1,757.9 1,609.7 holding in GCP SA +67% 18.1 Equity accounted-investees, other 367.9 295.9 Non-curren
Slide 10: EPRA NAV
EPRA NAV Sep 2018 Dec 2017 € millions Per share € millions Per share EPRA NAV (in €bn) NAV per the financial statements 9,202.6 7,249.9 Equity attributable to perpetual notes investors (1,565.9) (1,173.3) NAV excluding perpetual notes CAGR 7,636.7 6,076.6 Effect of conversion of in-the-money convert
Slide 11: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE Debt maturity profile Proactive debt management Debt maturity Cost of debt 7.6 years average 1.8% Ø maturity cost of debt Interest hedging structure 97% hedged 91% 6% 3% Fixed, swapped cap variable Loan-to-Value Strong cover ratios 1-9/2018 Unencumbered assets €10bn 71
Slide 12: 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 13: Operations and Portfolio
OPERATIONS AND PORTFOLIO 13
Slide 14: Commercial Investment Properties (Sep 2018)
COMMERCIAL INVESTMENT PROPERTIES (SEP 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 6,945 2,980 10.7% 356 10.7 2,331 5.1% Hotel 3,267 1,047 5.3%
Slide 15: Commercial Portfolio – Potential to Come
COMMERCIAL PORTFOLIO – POTENTIAL TO COME Commercial in-place rent Commercial September 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
Slide 16: Top Tier German/NL Cities (Sep 2018)
TOP TIER GERMAN/NL CITIES (SEP 2018) * Others includes, Brussels, Rome, Vienna, Edinburgh, Dublin, Bremen, Nuremberg, Kassel and others 16
Slide 17: Top Tier Cities (Sep 2018)
TOP TIER CITIES (SEP 2018)* Asset Type Breakdown accounting for 39% holding in GCP Residential geographical breakdown Commercial geographical breakdown 17 * all breakdowns are by value
Slide 18: Top Tier Cities Within Asset Classes (Sep 2018)
TOP TIER CITIES WITHIN ASSET CLASSES (SEP 2018)* Commercial asset type breakdown Office geographical breakdown - €6.9bn Logistic/Wholesale/Other geographical breakdown - €1.2bn Hotel geographical breakdown - €3.3bn Retail geographical breakdown - €0.9bn 18 * all breakdowns are by value
Slide 19: 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 20: Berlin landmark property: Potsdamer Platz
landmark Berlin property Potsdamer Platz: The prime commercial and tourist center Potsdamer Platz Office Potsdamer Platz Office Crowne Plaza Potsdamer Platz Checkpoint Charlie Hotel Potsdamer Platz Potsdamer Platz Potsdamer Platz Office Office Residential (GCP) Office Hilton Gendarmenmarkt Hotel Gen
Slide 21: Quality Berlin assets around Kurfürstendamm
Berlin landmark property Quality Berlin assets around Kurfürstendamm (Ku’Damm) Moxy by Marriot Berlin AC by Marriot Potsdamer Platz Mitte Hotel Berlin Mitte Hotel KuDamm KaDeWe Berlin City Center Mitte Residential (GCP) Retail/Office Berlin City Center Mitte Berlin Tiergarten Ku’damm /Uhlandstr. Off
Slide 22: Frankfurt: Quality assets in central locations
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 HBF Office Frankfurt Frankfurt Büro Center (FBC) Office landmark prop
Slide 23: Defensive Portfolio with Strong Tenant Structure
DEFENSIVE PORTFOLIO WITH STRONG TENANT STRUCTURE -Limited dependency on single tenants due to large tenant base of approx. 3,000 tenants -Top 10 tenants represent less than 20% of rent -Long lease terms -Portfolio WALT as of September 2018: Office Hotel Retail Logistics/Whole Total sale/Other 4.7 ye
Slide 24: Highly Performing Hotel Locations
HIGHLY PERFORMING HOTEL LOCATIONS Hotels by category (by value) Well diversified portfolio of over 100 hotels totaling €3.3bn and over 1m sqm as of September 2018 High proportion (78%) in 4 star hotels, meeting the rising market demand from tourism and business travel Long-term and fixed leases to t
Slide 25: Strategic Top Tier Hotels in Strong Locations
STRATEGIC TOP TIER HOTELS IN STRONG LOCATIONS Hotel: Rooms: Brand: Hilton Berlin Gendarmenmarkt Prime Center 601 InterContinental Frankfurt Prime Center 473 Hilton London Hyde Park Prime Center 132 Hotel: Rooms: Brand: Hotel Rooms: Brand: Crowne Plaza Berlin Prime Center Potsdamer Platz 256 Holiday
Slide 26: Appendix
KS 5A (arounvrown APPENDIX aa FO (iT _ 2
Slide 27: Equity Analyst Research Coverage
EQUITY ANALYST RESEARCH COVERAGE Covering Analysts Analyst Research Target Price Key index inclusions: -MSCI ACWI - MDAX -MSCI World -MSCI Germany - MSCI Index Series - FTSE EPRA/NAREIT -Global Developed -Europe Developed - STOXX Europe 600 -Eurozone -Germany - GPR 250 27 - DIMAX 27
Slide 28: Aroundtown's Share
AROUNDTOWN‘S SHARE Share performance and total return since initial placement of capital (13.7.2015) The share Shareholder structure Share issue price/volume development Frankfurt Stock Placement Exchange (Prime Standard) 13.07.2015 First equity issuance (€3.2 per share) Number of shares (basic) 1,1
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 €1.6bn €6.9bn EUROPE 600 €2.9bn €0.8bn Equity and bond Equity Convertible bonds Straight Bonds bookrunners Largest European Capital market activ
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 with a focus on large EU STRONG CASH FLOW, QUALITY cities LOCATIONS IN TOP TIER CITIES, primarily in Germany/NL Income GROWTH POTENTIAL Capital generating recycling by REPOSITIONING AND portfolios selling non- with value- core assets add potential OPERATION
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: 2,397 per km2 ► GDP growth1 : 3.3% ► Migration balance2: 1.1% ► Population density3: 1,734 per km2 Hannover ► GDP growth (NI) 1: 2.5% NRW ► Migration balance2: 1.3% ► GDP share 2017 : 21% of
Slide 35: Germany/NL – Growing and Top Tier Economies
GERMANY/NL – GROWING AND TOP TIER ECONOMIES GDP per capita in 2009 – H1 2018 (in €) Strong trade balance for Germany and NL (in €bn) Source: Tradingeconomics.com, data for June 2018 *At an exchange rate of €1.1208/GBP Source: Eurostat, unadjusted Aroundtown’s competitive advantage starts with the re
Slide 36: Germany/NL – Strong Labor Market
GERMANY/NL – STRONG LABOR MARKET Development of gross wages Germany (in €) Unemployment rate June 2018 Source: destatis Source: Tradingeconomics.com …which is further supported by a strong labor market with increasing purchasing power Unemployment rate Germany 2003 - June 2018 Unemployment rate Neth
Slide 37: German Office Market Low Supply and Strong Demand
GERMAN OFFICE MARKET LOW SUPPLY AND STRONG DEMAND… Office employment growth remains strong* Continuously strong demand at low supply *In Top 7 locations according to DZ HYP: Berlin, Munich, Frankfurt, Cologne, Hamburg, Düsseldorf, Stuttgart Source: DZ HYP German Real Estate Market report – 2018/2019
Slide 38: German Office Market Increasing Rents and Lower Vacancies
GERMAN OFFICE MARKET …LEAD TO INCREASING RENTS AND LOWER VACANCIES Strong reductions in vacancy in top locations Strong economic fundamentals and high office employment drive up demand, whilst supply is lacking, reducing vacancies Source: DZ HYP German Real Estate Market report – 2018/2019 - Bulwien
Slide 39: German Office Market Investor Appetite Reduces Yields
GERMAN OFFICE MARKET MEANWHILE INVESTOR APPETITE REDUCES YIELDS Low treasury yields and continued high demand, especially in office… Source: DZ HYP German Real Estate Market report – 2018/2019 – Datastream, OECD Source: DZ HYP German Real Estate Market report – 2018/2019 – Ernst & Young Source: DZ H
Slide 40: Netherlands Office Market
NETHERLANDS OFFICE MARKET …RESULTING FROM FAVORABLE DEVELOPMENTS Current trends show very favorable market developments… Office Employment Office take-up 2015 -> 2017 7.5% 2015 -> 2017 4.5% Vacant space -29.7% Passing rents* 2015 –> H1 2018 2015 –> H1 2018 4.6% *Excl. incentives Total Office Stock -
Slide 41: German Hotel Market Overview
GERMAN HOTEL MARKET OVERVIEW CONTINUED STRONG DEMAND GROWTH Overnight stays across all hotel accommodation types in Germany RevPar development Rated hotels by category Source: Smith Travel Research (STR) Source: hotelstars.eu Source: destatis 45412-0012 – extracted October 2018 Tourism in Germany ha
Slide 42: German Wholesale and Logistics Market
GERMAN WHOLESALE AND LOGISTICS BENEFITING FROM IMPROVED MARKET CONDITIONS Strong consumer climate provides strong benefits to wholesale and logistics, economic metrics such as Germany’s strong export position provide further benefits, increasing take-up sector wide Increasing take-up of space Sharpl
Slide 43: 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 2012-2017, forecast based European Commission spring 2018 forecasted growth rates From 1991 to 2016 the amount of households increased by 16.2%
Slide 44: Berlin
Berlin 44
Slide 45: London
London 45
Slide 46: Frankfurt
Frankfurt 46
Slide 47: Munich
Munich 47
Slide 48: NRW
Cologne Dortmund Dortmund Cologne Duisburg Essen Düsseldorf Düsseldorf Düsseldorf NRW Essen Düsseldorf Düsseldorf 48
Slide 49: Amsterdam
nelB AD z io enc ceNTER a if & vat ‘ Mt
Slide 50: Stuttgart Baden-Baden
Stuttgart Baden-Baden 50
Slide 51: Hamburg
Hamburg 51
Slide 52: 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